ABC VIC Statewide Drive

Interview

DCI022/2017

28 February 2017

Subjects: Chief whip, Australia's energy security, Victorian transport spending

Nicole Chvastek: Darren Chester is the Minister for Infrastructure and the Nationals Member for Gippsland. Darren Chester, good afternoon.

Darren Chester: Good afternoon, Nicole.

Nicole Chvastek: Is this the first step to George Christensen leaving the party?

Darren Chester: No, quite the opposite, Nicole. As I think you probably heard in those comments from George, he is a very passionate member of the Nationals. He loves our party, he loves working for his community up in Queensland, and he is a bloke who likes to speak his mind on issues he is concerned about. Now, I would be very confident that George will be a member of the Nationals all the way up to next election and he will win his seat again. He is a good local member, and I expect him to do very well in the next campaign in a couple of years' time.

Nicole Chvastek: He is not the greatest team player of all time, though, is he? He was carrying around a resignation letter in his pocket for a while, and they say disunity is death in politics—the last thing you need while the rise of Hansonism just seems unstoppable.

Darren Chester: Well I don't know about whether he was carrying around a letter. It is speculation I have read as well, and I'm not sure if that's true or not. From my time with George, since I have been a member of parliament, I found him to be a terrific local member. He goes in and fights hard for his community; that is what people expect of the Nationals. They expect us as local members to be real champions and then to deliver for our communities. I have worked with George very closely in my role as Minister for Infrastructure and Transport to deliver some funding for important road works up there, and he has been a good hard worker for his community, and I'm sure he will continue to do so and be successful in the future.

Nicole Chvastek: George Christensen says we need more gas-fired power stations in Australia. Do you support the Andrews Government ban on conventional and unconventional gas exploration in your electorate?

Darren Chester: That one is a bit out left field, Nicole. What I do support is making sure we have got good, reliable baseload energy so that we can support industry and manufacturing across Victoria, and affordable electricity prices for our communities. Part of the problem we have got right now is this push towards renewables, which certainly play a role in the future of our energy markets, but don't allow for that baseload energy supply. So obviously someone like myself who represents the Electorate of Gippsland and Latrobe Valley, where we have a lot of brown coal available for baseload reliable energy, I see that playing a major role into the future into Victoria's energy grid. In terms of gas, that is a decision for the Victorian Government in terms of exploration and production from onshore gas, but we need to keep in mind that just off the coast of Gippsland, for the past 50 years the oil and gas sector in Bass Strait has been a critical part of our energy mix.

So look, I guess in terms of that, that conversation is ongoing with the community. You need to win the hearts and minds of the community and prove that it can be environmentally safe to undertake that sort of exploration and production work, and that is where I think the decision rests at the moment.

Nicole Chvastek: People like Josh Frydenberg and George Christensen aren't that—are more equivocal about the benefits of gas exploration in regional communities. So do you think that the Andrews Government should lift its ban on conventional and unconventional gas exploration?

Darren Chester: Well, the question there I think, Nicole, and I understand where you are heading with this, but the question is more about your energy sources; having mixed energy sources, making sure it is affordable and doesn't impact on peoples' cost of living to the point they can't afford to heat their homes or cool their homes in summer.

Nicole Chvastek: Sure, but there is concern about miners coming into prime agricultural land, particularly in electorates such as yours.

Darren Chester: Absolutely, and it is a difficult issue. I'm sorry if I sound like I'm on the fence a bit. What you need to make sure with gas exploration and production is—quite a few things. One, you need to, I think, have the permission of the landholder, so I think a right of veto is very important for the farmers. Two, there needs to be a reasonable return to the farmer or the landholder involved, so that if gas production was to occur in the future the farmer actually benefited from that, and in some ways it would help them to then invest more in their agricultural enterprise, because the gas production only takes up a small envelope of land. You also need to make sure that production or activity doesn't occur too close to regional towns where it would have too much of an impact as well.

So there is a whole lot of factors that I think need to be considered now, and the environmental considerations or the potential for impact on the water table are critical elements as well. So all of those factors have to be considered. So I'm sorry if I'm not giving you an unequivocal answer today, but I believe that we have time to carefully assess what we have available to us in Victoria, recognising that energy is a critical issue, not just for us as households and people in our own homes, but also for the future of our manufacturing sector. Part of that conversation has to involve discussion about brown coal, when you have got still in excess of 300 years of brown coal available for our use in Latrobe Valley, and I'm afraid there is an obsession within the inner suburbs of Melbourne to shut down coal-fired power stations at great expense to the community and massive dislocation in regions like the Latrobe Valley.

Nicole Chvastek: So what are you suggesting that we do with those brown coal reserves that are there? Are you advocating building another power station, brown coal power station?

Darren Chester: I think we need to be very open to that discussion as a community, Nicole. We have got in the Latrobe Valley these four power stations—Yallourn W, Hazelwood, Loy Yang A and Loy Yang B. Now, if you added up their total emissions for the year it would only amount to 0.11 per cent of total global emissions. So what that means is if you shut down every power station in Latrobe Valley, the impact on global emissions will be very small, but the impact on our community, on Victoria, on our nation would be devastating.

We need to be realistic when we talk about playing our role, as Australians, in reducing our emissions, and we accept our responsibility there, but we need to make sure we are not ahead of the game. We need to make sure we are not causing that massive social and economic disruption that comes from shutting down power stations. Now, all of our power stations are several decades old. Around the world, they are still building coal-fired power stations which have the capacity to have lower emissions than the current ones that are being used in Victoria. So I think we need to be open to that conversation, and that's basically what the Prime Minister said a few weeks ago.

Nicole Chvastek: Isn't it time to turn away from fossil fuels? Isn't it time to leave behind 19th century sources of energy and look to the future?

Darren Chester: No.

Nicole Chvastek: Why not?

Darren Chester: Well, right around the world we are exporting our coal to other nations, which are using it to improve their manufacturing competitiveness, to heat their homes or cool their homes. We have an abundant resource in the form of coal in Latrobe Valley. It is a cheap and reliable form of baseload energy; it is the one form of energy that keeps our hospitals going, keeps our factories going, keeps our schools air conditioned, keeps…

Nicole Chvastek: Contributes to climate change.

Darren Chester: But Nicole, you are taking a very absolutist view of this. What I'm saying is by all means develop renewable technologies and have our share of the energy grid coming from renewables, but at the same time be realistic about this. We need to understand that that baseload reliable energy is going to still come from coal in the Latrobe Valley for the foreseeable future, and there are ways to lower the emissions from coal-fired power stations by building a more modern station than the ones we have at the moment. Now, Hazelwood, which is the one that is slated for closure at the end of March, is the best part of 50 years old. Now, not many of us are driving around in 50 year old cars; we are driving around in cars which have lower emissions than the ones we drove 50 years ago. You can actually build coal-fired power stations with lower emission and meet the baseload energy needs of your community.

Nicole Chvastek: The Clean Energy Finance Corporation chief Oliver Yates told a Senate Estimates hearing that he had received an email on Friday from a company requesting a loan for a proposed $1.2 billion 900 megawatt coal plant with carbon capture and storage. Is that the sort of new plant that you would like to see located in Gippsland?

Darren Chester: Well I wasn't aware of that conversation, but what you have just described is exactly where the future lies, I guess, in terms of coal-fired power generation. If you have the capacity to capture the carbon dioxide, pump it underground and store it—the carbon capture and storage you refer to—that could be the breakthrough that solves a lot of problems in terms of the emissions that you and I have just been talking about. Obviously, we mentioned before the Gippsland Basin, the oil and gas basin; it seems to be geologically one of the better opportunities to actually practice carbon capture and storage, and that is why there is a lot of research going on right now based out of Gippsland about whether it is possible on an industrial scale, rather than just on the pilot scale that has been done in the past.

Nicole Chvastek: I'm speaking to Darren Chester, the Minister for Infrastructure and Nationals Member for Gippsland. Darren Chester, The Australian reports today that Barnaby Joyce, your leader, wants to take control of the $50 billion infrastructure rollout because the Nats are coming under increasing electoral pressure from One Nation. It reports that he has put you notice that he wants your job to do this, the Infrastructure portfolio.

Darren Chester: Well all I can say, Nicole, is you shouldn't believe everything you read in newspapers. I don't think anyone really cares whether Barnaby wants Darren's job or Darren wants Barnaby's job. What they want to know is, are we fighting for their jobs? Are we standing up for them? Are we delivering the things we want to deliver for regional Australia? Right now I'm very fortunate to have the role of Minister for Infrastructure and Transport. We are rolling out $50 billion worth of infrastructure right across Australia. My challenge as a passionate Victorian and a passionate regional Member of Parliament is to make sure a fair share gets out to our regions, a fair share comes to Victoria, and I am working to do that every day that I have the job.

Nicole Chvastek: Josh Gordon writes in The Age Victoria is Australia's forgotten state when it comes to infrastructure funding, quote: An analysis of data from the Federal Budget Update shows Victoria has been allocated an average of $82 per person, and the national per capita average is $257 per person. Given that you're the Infrastructure Minister, why is Victoria—particularly regional Victoria, being short-changed?

Darren Chester: Well that is your description of being short-changed. We need to wind back this conversation to 12 months ago, and I don't like living in the past but I need to make this point: There was $1.5 billion given to the Victorian Government to build the East West Link, and nothing happened except Victoria cancelled the contracts and paid $1.2 billion in compensation to not build a road—an absolutely bizarre situation. What happened was the $1.5 billion from the Federal Government was basically locked in a Victorian bank account, and there was an impasse about how it would be spent.

The Treasurers couldn't agree, and when I took on this role 12 months ago I managed to negotiate an agreement with Victoria, and we now have $3 billion worth of work rolling out across the state. Now that is work like the Echuca-Moama Bridge, which we have reached agreement on; there's a massive upgrade of Great Ocean Road about to start, the Western Highway, the Calder Highway, Murray Valley Highway, Princes Highway. These are all projects that either have started or are going to start this financial year, following the work we have done with the Victorian Government over the past 12 months.

Now my aspiration is to get more for Victoria. As I have said, as a passionate Victorian, as a passionate regional MP, I know that if you invest in better roads, you will save lives in our community. I know that if we have better rail links, more people will be able to live in our communities and our communities will grow. These are the conversations I am having with Victorians virtually every week, and I want to make sure that we get an increased share of infrastructure spending in our regions. So, that is what I'm working towards and I'm very proud of what we have been able to achieve in 12 months, but I fully recognise I've got a big job to do, and I'm very keen to get on with.

Nicole Chvastek: Three billion dollars sounds great in dollar terms. What is it comparable to the rest of the country? Because this analysis shows that we are getting a third of what everybody else is getting.

Darren Chester: Well, the analysis—you can make statistics say what you want them to say. If you include in those numbers the fact that we are still committed to East West Link and prepared to put another $3 billion on the table for that, then the figure goes up to about 21 per cent of our national land transport spending would be in Victoria. So it depends which figures you throw into the equation to come up with the numbers you want. What the money means in terms of regional areas right now is the Murray Basin Rail freight project is underway and construction is delivering jobs and it is going to improve freight outcomes for that part of the state. What it means is we are going to have safer roads on our major highways as a result of the money we're spending in partnership with Victoria, and it means that some of these other projects closer to the city, like the Monash Freeway upgrade, will continue. So what it means is work on the ground every day, delivering the improvements we want.

Nicole Chvastek: Why isn't—if we are getting such a great deal, why isn't this economic boost flowing through to other sectors? Wages in state capitals are growing at three times the rate of wages in regional areas. VCOSS says poverty is more acute in regional areas—15.3 per cent, as opposed to Melbourne's 12 per cent. It is reported that GDP in regional areas fell by 1 per cent in 2015–2016. So if you are providing such an economic boost to regional Victoria, why isn't it translating to higher numbers in these sectors?

Darren Chester: I'm not exactly sure what you mean there, Nicole. The work that goes on through the infrastructure spend people get paid the award wages, so those people would receive a good return for their day's work. More broadly, I guess, in our regional communities we do have lower average household incomes, and part of it is we have a seasonal workforce in many places. We have a service sector based on tourism in many of the areas which doesn't necessarily have the same high incomes. I guess on the upside, Nicole, the conversation you and I have had in the past is the affordability of housing in our communities means that on a lower wage you can still afford a reasonable quality home in regional areas compared to metro areas.

But look, I'm concerned. I have lived in regional areas all of my life. I am concerned about growth and prosperity in regional communities because I want my kids to be able to come back to the regions after they do their university training and have a future in our great regional towns. So, I'm not sure what the answer to that question is for you, Nicole, but I do know that the more we can invest in better infrastructure, the connectivity it provides between our regional towns and into our major centres provides more job opportunities for people that live there already, but also for people who might want to move to regional areas in the future.

Nicole Chvastek: Minister, as always, thank you very much.

Darren Chester: It is a pleasure, Nicole, and great to talk to you.

Nicole Chvastek: Darren Chester is the Minister for Infrastructure and the Nationals Member for Gippsland.