Radio National

Interview

DCI029/2017

24 March 2017

Subjects: Closure of Hazelwood power station, the future of the Latrobe Valley

Fran Kelly: Tony Abbott has re-entered the fractious energy debate, this morning. As we heard earlier, Tony Abbott is calling on the Turnbull Government to consider a bail out to keep Hazelwood Power Station open, at least until Malcolm Turnbull’s Snowy Mountains pumped hydro project can deliver. Now reports suggest that Hazelwood would need—well—many hundreds of millions of dollars, perhaps as many as $700 million to make that dream  true. But as our political commentator, Alice Workman has told us, the Federal Treasurer Scott Morrison has already slapped down this idea, this morning.

Darren Chester is the Minister for Transport and Infrastructure. He’s also the local National Party member for Gippsland, in the Latrobe Valley. He’s currently in Canberra, unfortunately. Minister, welcome back to Breakfast.

Darren Chester: Thanks Fran and thank you for taking the time to visit Latrobe Valley for your important broadcast, this morning.

Fran Kelly: Well, it’s an important issue; it’s an important issue here for the Valley, in terms of the future of the Valley and jobs. And it’s important for us all in terms of energy security in this country. As the local member and as a Federal Minister, would you like to see the Hazelwood plant stay open? Do you back Tony Abbott’s call for a bail out by the Turnbull Government?

Darren Chester: Well Fran, I’m not in the business as a local Member or as a cabinet minister of giving people false hope. And there’s been no requests made to the Federal Government, by the company ENGIE, to help it stay open. It made the decision for its own reasons to announce the precipitous closure of the power station. I’ve been critical of ENGIE for that. If this was going to be phased in over several years, there would have been more opportunity for the employees to adjust, the energy market could have adjusted, as well. But the decision to close all units at once has certainly created a great deal of uncertainty. It’s really hurt confidence in my community and that’s disappointing. But I don’t believe there’s any prospect of a bailout this late in the game.

Fran Kelly: But if it was possible, would you welcome it? I mean, we agree, we’ve had five months to talk about this and the AI Group have come out today, they’re calling for it, too. So there’s a whole lot of manufacturers. Would keeping Hazelwood open—even if it’s late in the day—would it be good public policy?

Darren Chester: Well the question is, Fran, primarily around can you maintain energy security and reliability after Hazelwood closes. And the reassurance we’ve been provided by AEMO—as late as last night—was that there was capacity to maintain energy security in Victoria and beyond. That doesn’t mean that I’m happy at all about Hazelwood closing. Don’t get me wrong on that regard.  I feel that it’s a bit like a grandfather’s axe, it’s been refitted and upgraded in the past and like your grandfather’s axe, had three new handles and five new axe heads, Hazelwood could have been refitted and upgraded. But once the decision was made by ENGIE, quite precipitously to close the whole eight units, I’m afraid without any prospect of the Federal Government being directly involved, that this closure will go ahead and that’s our challenge at a federal level, to make sure…

Fran Kelly: [Interrupts] So you’re just—so just to be clear, you’re not going to be lobbying the Prime Minister to keep it open. You’re not joining Tony Abbott in that call?

Darren Chester: I think it’s too late in the game for this conversation and I’m not going to give people false hope. What I’m concentrating on is the future of my community and what opportunities are there for us to invest in better infrastructure and new opportunities—particularly for young people—and to provide some confidence and certainty for the small business sector in Gippsland, Latrobe Valley. We’ve got to…

Fran Kelly: [Interrupts] Well, let’s talk about that now because that’s exactly what we’ve been hearing this morning, here on Breakfast, from the community members who have been joining us here, or speaking with Matt—over the last couple of days -  in terms of what the Federal Government is doing to make the transition for workers earlier. Because a lot of people have been—one of the constant themes is anger—really—from workers and residents, that they reckon despite the warnings, little has happened in the meantime from the Federal Government.

Darren Chester: Well that’s not true, Fran. The investment in Gippsland and the Latrobe Valley—at a Federal level—in recent years has been very significant. You’ve seen in the order of $385 million in to the East Sale Defence Base, which is going to give it a future of more than 20 years as the home of defence aviation basic flight training. You’ve seen $210 million for Princes Highway duplication works. We’ve been investing in community and sporting facilities, as well, to improve the liveability of the region.

I’m determined as a local member to make sure we are investing in the infrastructure that connects our community—that connects us within our own region—but also connects us in to those jobs in the eastern suburbs of Melbourne, so that some people will be able to commute from—perhaps—Traralgon or Morwell, in to the eastern suburbs, which could be 40 or 50 minutes away, which is what a lot of people do already throughout our region. We’ve got a very mobile workforce. We need to make sure we are investing in the jobs of the future but at the same time fighting for the jobs we’ve already got in our more traditional industries.

Fran Kelly: So how quickly—how quickly can you bring on these infrastructure projects and what about something like Barnaby Joyce managed to do in Armidale, in New England, during the last election, which is get a federal office relocated to Armidale. Are you looking at something like that? Could that be a short-term and more immediate answer for some jobs here?

Darren Chester: I think that’s a terrific point, Fran. In the Latrobe Valley—over the last 20 years—we’ve had some success in terms of de-centralisation. You may be aware that ASIC established itself a business database registry in Traralgon, in the order of 20 years ago. We’ve got a smart centre for DHS, in Traralgon, as well.

Fran Kelly: So are you working on something to try and bring, say, to Morwell?

Darren Chester: I’m always looking for opportunities to take jobs out of the city and get out to Gippsland, I can assure you of that.  We offer an incredible lifestyle. Where else can you be in Australia, where in 90 minutes you can go to the snow, you can get back to a major capital city like Melbourne. You can go to the Gippsland Lakes and Ninety Mile Beach. Got forests all around you. It is a great location and…

Fran Kelly: But have you spoken to anyone in the Government, about doing it?

Darren Chester: Fran, I speak to other ministers and departmental people almost every week on opportunities to de-centralise positions out to my community.

Fran Kelly: I’ve got one job creation scheme for you—that I’ve noticed as I’ve come here to Morwell, yesterday—there’s a big power plant—I think it was called the Morwell Plant—closed down three years ago, it seems to be sitting there, it’s not being pulled down. That would create a few jobs wouldn’t it? What’s happening with that?

Darren Chester: You’re right. And when you look to the future—I mean that location, along with the future of the Hazelwood site and the future of the coal resource itself—we’ve got to keep in mind there’s hundreds of years of coal in the ground in Latrobe Valley which can have alternate uses; whether it’s hydrogen to fuel, whether it’s creating fertiliser, which is in demand, right across the agricultural sector, we’ve got to be looking at it as positive as we possibly can. Recognising we have challenges. And we have many challenges in my community but we’ve got to look to the future, as well, and see what are the opportunities for young people. We’ve got a university —Federation University—which is going very, very well, and that’s providing more opportunities for young people to train in our region and learn skills.

Fran Kelly: Sure, all that’s happening now, but what can happen extra? Let’s talk about it, maybe just finally, we heard—I think it was Daniel, was it?—from Earthworks, earlier, they want to be able to sell bulk solar hot water to public housing. They want some Federal Government to help with this. Others in the community panel we spoke to earlier, talked about this as a power hub. We’ve got all the infrastructure, here. Is the Federal Government doing anything actively to encourage more renewable energy solar projects like Daniel’s idea there? Is that a good idea?

Darren Chester: Look, I think there’s a lot of merit.  Gippsland Solar is going particularly well as a local business. But I think we’re in furious agreement, what we need is a longer-term view around this. The challenge around Hazelwood is not going to be resolved in a week. It’s going to take us years to work through all the solutions required in our community. But we’ve got to be positive about how we go about it. Investment I see—of particular importance—is improving the connectivity through our rail links. We have a sub-standard rail link and I’m working with the State Minister in relation to, are there opportunities for the Federal and state government to work together on that…

Fran Kelly: [Interrupts] Sorry to interrupt minister. And I know that and the locals want that rail work too, they want that. But the Federal Government could give an immediate contract to Earthworks to put in 40 or 50 workers to work on that solar project on public housing. Will you do that?

Darren Chester: Well no Fran, I can’t give an immediate contract to someone who’s never sent me a submission or put a business case to me. You’re asking on the radio to support a project I’ve never even seen a business case for. Now there are other businesses in the Latrobe Valley with long history of (indistinct) people who are coming forward with projects saying; if we can co-invest with you here we can actually increase our employment. And those businesses have a long and proven history in Latrobe Valley of being successful and viable. They’re opportunities I think the state and Federal Government should be working together on, as well. We have a lot of strengths in Gippsland and the Latrobe Valley and I just hope that the message that people receive today is that we have a great future. This is a challenging time in our region’s history. But we have a great future ahead of us, as well.

Fran Kelly: Okay, Darren Chester. Thank you so much for joining us. And I think there will be some more submissions coming your way soon, after this. Thank you very much for joining us.

Darren Chester: All the best, Fran. Have a great day.

Fran Kelly: Darren Chester, the Minister for Transport and Infrastructure and the Local National Party Member for Gippsland, where the Latrobe Valley is, where we’re sitting here in Morwell, this morning.