Steve Fielding (Victoria, Family First Party) Share this | Link to this | Hansard source

My question is to Senator Minchin, the Minister representing the Treasurer. Minister, last month the Treasurer announced federal funding for a $360 million project to reduce greenhouse gas emissions at Victoria’s Hazelwood power station, with construction to start next year. The Victorian government is also funding the project. Despite this, others are calling for Hazelwood, which supplies up to one quarter of Victoria’s power, to be shut down. Minister, what would be the effect of shutting down Hazelwood power station, in the Latrobe Valley, which employs more than 500 people?

Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Link to this | Hansard source

I do welcome the question, genuinely without notice, from Senator Fielding and acknowledge his considerable concern for all Australians who work in the great Australian coal and energy producing industries. I respect his concern for their welfare and his acknowledgement that the coal industry in Victoria in particular is a very significant part of that economy. The capacity of Victoria with its coal reserves to produce world-competitive, low energy prices is a major reason why Victoria has attracted significant energy-intensive industries which ensure a high standard of living for Victorians and the surety of a reliable, safe power supply to that state. It is a vital part of that state economy. Wanton and irresponsible statements by anybody in the community—but particularly the left wing of the Labor Party, which seeks to assert that we can simply shut down the coal industry in this country—have no regard for the workers in those industries and for the households and families who rely on the relatively cheap, reliable power which coal in this country provides.

It is all very well for some in the community and some in the Labor Party to go around blindly asserting that you can replace coal with wind and solar energy. Anyone who has studied this issue knows that that is simply and utterly impossible to do. Solar and wind, while not directly competitive in price, can only ever supply power at the margin. Those on the other side who are serious about eliminating greenhouse gases from our community can only do so really by embracing nuclear power—and, if that is what they want, they had better get honest about it. That is the trouble with the Labor Party: they make bland, wild promises about the elimination of greenhouse gases but at the same time they say they will not have a bar of nuclear power.

The coal industry in Victoria is very important. I cannot tell Senator Fielding specifically what direct impact shutting down Hazelwood would have on the Victorian economy and Victorian employment, but I am very happy to get the precise figures. There is no doubt it would have a very significant and deleterious impact on the Victorian economy. As we have said, we have to recognise in this country that the use of fossil fuels will continue to be a major part of the energy supply for a long time to come. What we have to concentrate on, if one is serious about reducing greenhouse gas emissions responsibly and sensibly and in the national interest, are the opportunities for reducing the carbon emissions from using coal as a power source. But we need to do that in a way that is in consort with our international peers, not in a way that is simply counterproductive to Australia’s national interest and does nothing but effectively result in disinvestment in this country—putting jobs and investment offshore by making it uncompetitive to sustain those industries in Australia.

Steve Fielding (Victoria, Family First Party) Share this | Link to this | Hansard source

I ask a supplementary question, Mr President. Minister, is the government concerned that some environmental policies, such as closing Hazelwood power station, if adopted, would jeopardise economic growth and responsible economic management?

Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Link to this | Hansard source

Senator Fielding is quite right. I note, for example, that the Hazelwood power plant on its own generates one-quarter of Victorian electricity. So it is utterly irresponsible to be contemplating anything that would result in the closure of that power plant. I point to Mr Beazley’s policy, which is apparently to cut greenhouse gas emissions by 60 per cent in this country. That is what Mr Beazley has said. ABARE modelling suggests that, if you were to attempt to do that in this country, petrol prices would double, GDP growth would be 11 per cent lower, real wages would be 21 per cent lower, oil and gas production would fall by 60 per cent, coal production would be down 32 per cent and electricity output would be down 23 per cent. It would be just an outrageous policy of the Labor Party. I am not surprised that some in the Labor Party are distressed and upset by what Mr Beazley is irresponsibly proposing to do with respect to the energy industries of this country. (Time expired)