Event Interview with David Speers, Speers, Sky News
Speaker Jennifer Westacott, David Speers
Date 14 February 2019
Topics Tasmanian economy, big and small business, Strong Australia
David Speers, host Sky News: Jennifer Westacott is with me now in fact, thank you for joining. I want to get to the story of Tasmanian business in a moment but let's just pick up on what's going on in Canberra. Not on the physical altercations and so on but the other big legislative move from the government - they've shelved their 'big stick' energy policy plan because they're worried about a defeat in the house there. Business don't really like this 'big stick' approach. Why?
Jennifer Westacott, chief executive Business Council of Australia: Because it won’t work. And it's going to actually cause an opposite effect. Let's remember what this is proposing. That a government can use their power to split a company up because of a view on prices. Now prices, you know, we could spend five interviews talking about how complicated this is. It will not put people's prices down. What it will do is deter investment. Here we are in Tasmania, we are going to talk about some of the infrastructure projects we talked about at lunch. But seriously, do people really think that companies are going to invest their money in energy projects, in other projects with the prospect of this hanging over their head? And worse still David, every single person who's looked at this - the ACCC, Ian Harper this week, one of the leading experts in competition policy, they all say unnecessary, extreme. That's not a word regulators you use very often. Extreme. And, you know, recently Treasury appearing before the Senate inquiry said, well we haven't done any work on a connection between this and whether or not prices would go down.
David: But why has it got to this point? Can you understand? I mean, politicians are reacting to a community sentiment, but here at least the government is, that energy companies are ripping us off. That they're shutting down things like Liddell coal fired power plant because it's profitable to them. But it leaves the poor old consumer high and dry.
Jennifer: Well, let's get the facts. I mean, retail margins are 13 per cent of people's bills. I mean, this is a massive policy failure. We've had stop-start carbon schemes. They've just created tremendous uncertainty. We've gold plated the network, we've locked up supply in some states. We have pushed renewable power into the system. There's nothing wrong with renewable power, but it just wasn't calibrated. So, then we ended up with that dampening prices and then reliability problems. I mean, this is just one mess after the other, you know, surely we should just stand back from all of this. And say, what do we want to achieve? We want to achieve lower prices. And the government has got a myriad of reports by experts saying how you could do that. So why don't they do that?
David: There are a couple of parts to this 'big stick' legislation that's simply been shelved. It's still part of government policy - they will take it to the election.
David: one is the divestment that will force companies to break up, I understand business think that's the worst of all of these things. But another part is underwriting, the taxpayers money, investment in new power generation. Before we get to our local example here that I want to talk about, what do you think about that idea of the government underwriting power? And should it include coal fired power?
Jennifer: Well you've got to always ask why governments underwrite things. Because they are underwriting the taxpayers money. And you have to say, well really is that actually necessary? Why don't you create the conditions for companies to invest? Because when governments do things, they push companies out of the market and that's something else they can't do as a government. So I'm always sceptical.
David: So does that also put the brakes on investment decisions for businesses? If they're worried...
Jennifer: Well exactly.
David: ...hang on my competitor might get a bit of taxpayer help?
Jennifer: Exactly. Or they would just say well if government's going to do this, why am going to do it? And then you've got to take all these things as a cumulative effect. You know, you've got that, you've got no certainly on how emissions are going to be treated. You've got, you know, a complete mess in energy policy.
David: But if underwriting is going to get some more energy projects off the ground?
Jennifer: Well then pick the right projects.
David: And what are they?
Jennifer: Well, you know, we're here in Tasmania, a lot of people have been talking to us about this interconnector which would allow the kind of surplus, which is of course renewable surplus.
David: Let's explain what that is to people. So there is an interconnector at the moment but it only has a certain capacity to connect the power grid here to the mainland and they generate so much hydro power in Tasmania. They often have a huge surplus of energy that they just can't get off the island. Whereas South Australia and Victoria would sure as hell use it.
Jennifer: Correct. That's exactly right. And so let's look at those sorts of things. Because again you're underwriting something say HELE coal fired power station. I don't really have any objection to that but it's going to take a long, long time to get done. And it's going to be massively contested. That's not necessarily a reason for not doing it but why don't we do some simple things? Why don't we look at this interconnector? It just seems like a no brainer to me. I haven't seen the feasability studies, I've asked to see them. But, you know, the idea that here is a state that produces effectively large scale renewable energy through hydro that can send stuff across tot he mainland that can deal with these peaks and troughs that we have particularly in hot weather. Why don't we look at that?
David: This is the whole battery of the nation idea.
David: In Tasmania there's huge amount of hydro power. So, you're saying if the government's going to underwrite anything...
Jennifer: Why wouldn't you look at something like that? And the other thing is that you get a double whammy. You put huge economic stimulus back into the Tasmanian economy. Now it doesn't, it's going fantastically. It's growing stronger than the rest of the country. But you know, why wouldn't you sort of look at, a kind of a double win, why wouldn't we look at those things? So, I just think we've got to make sure that we're trying to solve the problem and we're clear what problem are we trying to solve. But are we trying to build a coal fired power station or are we trying to lower people's prices and give them more reliability?
David: Well this is also part of the infrastructure debate as well. What we put taxpayers money into. Today, Infrastructure Australia, which is the independent expert body that looks at what we should be putting our taxpayers money into. Has put up its annual list. The Priority List for infrastructure for 2019. I'm going be talking with them in just a moment. But without going through the specifics, how important is it that politicians on both sides look at this list and actually make the election commitments based on this list?
Jennifer: Well, I haven't seen the list cause we, you know, I've been talking to businesses here in Hobart today. But I think the principle that an independent body produces a list that says here are the projects of national significance.
David: Take the politics out.
Jennifer: Take the politics out. The thing I would add to what they're doing is, I guess I would make it a more strategic list. Because I think if we really want to have a proper management of population and cities and places, you've got to start saying where around Australia have we got to put investments? Where have we got to leverage, kind of, existing growth like here in Tasmania. And then you make the list, not just the sort of best of the states’ bids, but you make the list, the list that's actually going to get the country going. I'm not saying that, I haven't seen the list, but you know, I respect that institution enormously. But what we have to do is stick to what's there. I mean the priority order of things can change and that's the same for the infrastructure plans produced by the states. But the idea that things can just be, kind of, chucked off this list or ignored? I think, yeah, we've to hold people accountable.
David: I'm going to come back to that with Infrastructure Australia in a moment. A couple other things. We're here in Tasmania. We should talk about what is a success story. There are still, look, unemployment's a little bit higher here than the rest of the country. Youth unemployment as well. But the economic growth rate is actually higher in Tasmania right now than the rest of the country.
David: What's going on here?
Jennifer: Well, first of all, this is kind of a private enterprise doing what it needs to do. And this is private enterprise, a small to medium, large businesses kind of, creating some of the supply chain stuff. We talked today about Huon Aquaculture and Qantas - their relationship. Huge, kind of, boost to that company. What I think we're seeing is incredible enterprise, incredible imagination, determination and people just pushing through. And I don't think we should underestimate here in Hobart, the effect of Mona the art gallery. It's not really an art gallery in the way we think of these things. Incredible thing. But it's given everyone here a sense of pride, not just in Hobart but about across the state.
David: It's not a government thing.
Jennifer: And it's not a government thing. This is the kind of individual had a vision and I think what you're seeing here is people with vision, people with determination and an enterprise getting the state back on track, as opposed to government. I come here quite a lot, but I was here a few years ago. Most people were either working for the government or getting paid for by the government. That can't go on. Now we've got enterprise doing the heavy lifting, which was fantastic. The challenge I think is how they keep it going.
David: Okay, they've population growth going on and why wouldn't you? It's such a beautiful part of the, you can see the sea behind us.
Jennifer: It sure is.
David: Jennifer, thank you. We'll see you again tonight.