Interview with Christian Horgan, ABC Perth

CHRISTIAN HORGAN: Now, we brought you yesterday on Drive a chat with the Prime Minister who unveiled a mammoth plan to reshape the country's manufacturing landscape and keep production here and compete with global competition.

[Excerpt]

ANTHONY ALBANESE: We need to aim high, be bold and build big to match the size of the opportunity that is right there in front of us, and we have to get cracking. We have unlimited potential, but we do not have unlimited time.

We will bring together in a comprehensive and a coordinated way a whole package of new and existing initiatives; to boost investment, create jobs and seize the opportunities of a Future Made in Australia.

We want to look at every measure that will make a positive difference, investing in new industries and ensuring that workers and communities will share in the dividend.

[End of Excerpt]

CHRISTIAN HORGAN: At the heart of this will be a taxpayer-funded incentive scheme for clean energy projects, particularly renewable technology, so where does WA sit in all this. Well, Chris Bowen is the Federal Minister for Climate Change and Energy.  

Minister, where does WA sit in this? Are we going to be able to capitalise on it?

CHRIS BOWEN: Oh, right at the centre, I think, Christian, in a couple of ways. Firstly, there's two things going on here, I think, and they're related, as you said. There's our plans for a Future Made in Australia, and really, increasingly in our time that means a future where energy-related infrastructure, things that make renewable energies made in Australia, and I think with Western Australia's critical minerals deposits, and refining those and adding more value to those,  that's right at the centre.

And then separately the work we're doing with the Western Australian Government to ensure access to renewable energy, and we've got a paper out on that today, on the, what we're calling the Capacity Investment Scheme, which we're just consulting on how that will work in Western Australia, and Reece Whitby and I've been working very closely together to make sure that Western Australia gets its fair share of that support as well. So I think WA's right at the forefront of both things.

CHRISTIAN HORGAN: Well, we hear these umbrella terms about "renewable energy", and you know, "clean technology" and things like that. But what kinds of projects are you hoping to prioritise?

CHRIS BOWEN: Well, under the Capacity Investment Scheme, there's really two types. There's variable renewable energy, so that's, you know, the solar and wind, and we're looking to support 2.3 gigawatts of that for Western Australia. And then there's dispatchable renewable energy, i.e., the energy you can turn on and off, so supported by a battery or hydro, although that's probably not going to play such a role in Western Australia, we're looking at 1.1 gigawatts of that.

And then, as I said, separately, you know, just yesterday for example, even on the east coast, I was at a battery, Australian battery manufacturer talking about their plans for expansion in Australia; they want to expand into making battery cells, and I was talking to them about the critical minerals they'd need and where they'd get them from, and you know, obviously that conversation goes to Western Australia very, very quickly.

So I think on both of those things, Western Australia has key features at stake, and features we want support.

CHRISTIAN HORGAN: So what are your concerns that this means that the business community might become reliant on incentives?

CHRIS BOWEN: Well, I think the business community and the investment community knows that in this competitive world, where we're dealing with things like the Inflation Reduction Act in the US, Canada's got an $80 billion response, there's the Green New Deal in Europe, the Economic Security Act in Japan.

I mean we have to compete in that environment, and we want to ensure that the comparative advantage that Australia has, and the great advantages that Australian companies have aren't held back by having one hand tied behind their back in that environment.

Now good industry policy helps industries get up and running, it gets them nice and strong, and then of course they have to compete in a competitive world. And if you look at what we've done so far, and this is not just, you know, talking about what we will do in the budget, but also building on what we've already done, we've got things like Hydrogen Headstart and Solar Sunshot, which are both, you know, good supports that get the hydrogen industry, the green hydrogen industry going in Australia, and again Western Australia, so there's some very competitive bids in there, and then Solar Sunshot, which is to get solar manufacturing going, but it's about getting them going and getting them on their own two feet and then letting their natural advantages and their comparative advantages shine through for decades to come.

So I think that's pretty good industry policy, helping industry get up and running, not putting them on a permanent fit for, you know, years or generations, but certainly spending the first 15 years helping them getting up and running.

CHRISTIAN HORGAN: Well, I know there was a scheme previous to this that offered grants to develop this technology, and well, there were Western Australian companies that were utilising those grants, and then those grants kind of stopped, and they said, "Yeah, no more" and those companies really suffered because of it.

Are you going to adjust  well, do you think that the timeline should be adjusted for these companies as they might near closer; you're not saying not forever, but you get them near enough, we need to get them across the line.

CHRIS BOWEN: Well, again on both of those  yes, that's right, and on both of those schemes, there is the Future Made in Australia, the Hydrogen Headstart, Solar Sunshot type arrangement, or the Capacity Investment Scheme, which is supporting renewable energy directly, we're looking at a 15 year timeframe, and I think, you know, that's an appropriate timeframe to help getting businesses up and running, and getting investments underway and providing that support.

Again, we're dealing with a world where governments around the world are doing this, and we're not going to let Australia fall behind.

You know, take solar panels, for example, they're an Australian invention. 90 per cent of the solar panels around the world are using Australian technology, but we've put 60 million solar panels on our roofs in the last decade, and only 1 per cent of those have been made in Australia.

Now that doesn't make any sense to me, that you've got an Australian technology, and you've got Australia leading the world in rooftop solar. I mean we have more rooftop solar than any other country in the world, but we're not making them here. That doesn't make any sense. That means industry and government working together.

There's a great a new Australian company, one example, SunDrive, which has invented the most efficient solar panel in the world, taking silver out and putting copper in. Again, they want to make solar panels in Australia, and in response to our policy, they've announced that they will. That's a pretty good step forward for all of us, I would have thought.

CHRISTIAN HORGAN: Okay, so this plan, it is ambitious. How many jobs do you expect it to generate?

CHRIS BOWEN: Well, I mean I think obviously, wait and see what we do in the budget in terms of the specifics. The Prime Minister was outlining a direction of travel yesterday. There will be a lot more detail in the budget about exactly what we're doing to build on the Hydrogen Headstart and the Solar Sun Shot policy, and the National Reconstruction Fund, again, which Western Australian projects are already bidding strongly for, and in detailed discussions with the NRF about.

So the fact of the matter is that good, well-paying jobs increasingly are involved in renewable energy, and supplying renewable energy to existing industrial manufacturers, because increasingly consumers and investors around the world are going to demand clean energy and demand to see how the goods are being made and demand to know it's invested in, or made with clean energy, and that's really at the heart of what we're doing.

CHRISTIAN HORGAN: Look, this might sound and look good on paper, but yesterday we spoke with economist, Professor Mike Dockery, and he had reservations about our capacity to produce, and what he was actually saying is we moved away from manufacturing for a reason and should work to our current strengths. What would you say to those critics, and are we fighting a losing battle?

CHRIS BOWEN: I think manufacturing is a strength for Australia. I think we have remarkable skills. Yes, we are a higher-wage economy than other economies, and I don't want to compete, our Government won't compete by reducing wages; we can compete by ingenuity, skills and investments.

So I don't agree that manufacturing isn't a strength for Australia, and I think with the right supports we can be a complicated economy. Actually sometimes you want simplicity, but in an economy you actually want complexity; you want people doing lots of different things and adding lots of value in different ways.

I don't agree with that; I think manufacturing can be an important part of our future and making jobs for people with varying range of skills, from you know, great TAFE qualifications to PhDs to people leaving school, but you know, keen to work in manufacturing. I want to see more of those jobs, so does the Prime Minister, and I think we can do that.

CHRISTIAN HORGAN: Well, if you want more renewables, you've got to create a market for it. What targets do you have for how much new power generation should come from renewables?

CHRIS BOWEN: Well, we're going to get to 82 per cent renewables across the country by 2030, we're currently

CHRISTIAN HORGAN: Sorry, did you say 82 per cent?

CHRIS BOWEN: Correct.

CHRISTIAN HORGAN: Okay, where are we at?

CHRIS BOWEN: We're about 40 at the moment, so

CHRISTIAN HORGAN: Okay. You've got a bit of work to do.

CHRIS BOWEN: Absolutely.

CHRISTIAN HORGAN: I should say "we", but, no, I'm putting it all on you.

CHRIS BOWEN: I know what you mean, and that's fair enough. It was about 30 per cent when we came to office, it's about 40 per cent now. So yes, there is a lot of work to do, and Western Australia will be an important part of that story.

Again, I'm working pretty closely with Reece Whitby, who's a great Minister, and we've got good plans, and what we're talking about today with the Capacity Investment Scheme and 2.3 gigawatts for Western Australia  Western Australia's very important, you know, for all the industrial, heavy carbon work in the Pilbara.  

Again, Western Australia and us have done good work there, and with Reece's predecessor, Bill Johnston and I struck an agreement for $3 billion of support to help decarbonise the Pilbara.  We're supporting 2.3 gigawatts of new variable renewable energy for Western Australia.

Again Reece and I will have more to say when we've finalised all the agreements, but what we're out today doing is consulting on some of the detail, because the Western Australian energy market does work differently to the rest of the country. So we just have to make sure we get those details right.

CHRISTIAN HORGAN: Well, I just heard you utter the "Capacity Investment Scheme". Now tell us a little bit more about that.

CHRIS BOWEN: So that is our mechanism to support the roll out of renewable energy to help us get to that 82 per cent. That's where the Government says to renewable energy investors right across the country, "Okay, give us your best shot, give us your best bids, show us how much you can do and what support you need to do it, and we'll underwrite and provide minimum returns and we want to share in the profits over a certain level, so you tell us what you can share and tell us what your minimum is, and we'll back you."

And again, the Western Australian energy market is a little bit different to the East Coast, so we've just got a paper out there today making sure we've got all the details right, then we roll that out in Western Australia.

The Cook Government and the Albanese Governments have agreed that that is something we should do in Western Australia, and now we're just working through the details and finetuning that to support that 1.1 gigawatts of dispatchable renewable energy, and the 2.3 gigawatts of renewable energy.

CHRISTIAN HORGAN: Minister, it is a big plan. Spend our money wisely, please.

CHRIS BOWEN: That's certainly what we'll endeavour to do. This is a big plan, and it's a big change for Australia, and you know, this renewable energy revolution is unquestionably the biggest change in our economy since postwar reconstruction, arguably the biggest change since the Industrial Revolution for countries right around the world, and it does take management, and you don't draw a straight line and say, "Well, we're going to announce this policy, and this is exactly how it's going to go."

You do come across, of course, obstacles and things that weren't expected, but you respond in kind, and I'm very confident we're going to get to that 82 per cent renewable and we're going to be a renewable energy superpower for Australia, and Western Australia's going to play a real big role in that.

CHRISTIAN HORGAN: Minister, thank you for joining me on drive this afternoon.

CHRIS BOWEN: Thanks Christian, it's been a great pleasure. Good on you.

CHRISTIAN HORGAN: That was Chris Bowen, Minister for Climate Change.