Thursday, 20 August 2009
Questions without Notice
Liquified Natural Gas Exports
I thank the honourable member for his question. As the House will be aware from the remarks made by the government and by the companies in recent days, there have in fact been good developments as far as Australia’s natural gas sector is concerned. Of course, those developments hinge in part on Australia being viewed internationally as a reliable destination for large amounts of foreign investment. In that respect, I draw to the House’s attention a Dun and Bradstreet global risk indicator, released just today, which describes Australia as a safe haven for business investment. Australia’s rating was DB1d, which is the equal highest ranking achieved anywhere in the world. The only other countries to achieve this rating were Canada, Norway and Switzerland. Australia has the highest rating awarded to any economy in the Asia-Pacific region. According to D&B’s CEO, Christine Christian:
The latest GRI rankings show that Australia is a low risk environment for business investment.
Furthermore, she makes this observation:
The world is continuing to change at a rapid pace and although Australia is faring well compared to other nations we cannot afford to stand still.
She is right. She is absolutely right. This is good news in terms of international investor perceptions of doing business in Australia and, in particular, investing in Australia. That brings us back to the question of LNG investments and those at considerable scale—and it is good to have the Minister for Resources and Energy back from Beijing.
Earlier this week in Beijing, Exxon Mobil and PetroChina signed Australia’s largest ever export deal, a $50 billion contract to supply liquefied natural gas to China from the greater Gorgon project—a fact which, in itself, seems to have elicited a particular response on the part of those opposite yesterday.
And they seem remarkably silent on it today. The project will have a 40-year life and will generate export income and jobs for decades. The first 30 years of the life of this project will boost Australia’s GDP by $65 billion in net present value terms. The project will return more than $33 billion to the economy through the use of Australian goods and services over the project. The project will generate 6,000 jobs in the construction phase and will run for around five years in construction. The return in tax revenue over the life of the project will be in the order of $40 billion.
The member for Sturt, characteristically, mindful that he has the national bipartisan economic interest at stake here, interjects in a most negative fashion and says that there is in fact no role for government in respect of any element of this project. He is wrong on that point.
Mr Speaker, I rise on a point of order. I find it offensive that the Prime Minister would put words in my mouth that I did not call out and I ask him to withdraw them. It is called ‘verballing’ and I ask him to withdraw. I said no such thing and he knows it.
Order! The member will resume his seat. On his point of order, there are other avenues and processes of the House at his disposal to rectify the situation that he believes he is in. I would indicate to him, though, that it is a salutary lesson to all members of the chamber about the way in which members place themselves in some trouble if they continually interject.
Perhaps the member for Sturt could lead a South Australian walkout of the chamber today, given the success of the WA walkout yesterday! Mr Speaker, his interjection went to this question: what is the role for government in relation to these projects?
I draw his attention to the fact that earlier this week I advised the House that there were three outstanding matters in relation to the Gorgon project which we have been working on with the government of Western Australia and the joint venture partners to resolve. The first was a commitment by government to indemnify the joint venture parties against third-party claims following the closure of CO2 sequestration, (2) the issuing of the necessary production licences of the project and (3) the finalisation of the necessary environmental assessments and approvals. On the first of these, I have today written to the WA Premier confirming the Commonwealth’s agreement to share the long-term liability for the CO2 sequestered under the Barrow Island site. In relation to the production licences, I am advised that the Gorgon joint venture partners lodged an application for these licences with the Minister for Resources and Energy on Tuesday, as I understand it. Furthermore, on the question of the environmental proposals, that is what the Minister for the Environment, Heritage and the Arts and his WA state colleague have been asked to work on and they are continuing to do so diligently. It is important that these processes are attended to with all thoroughness, as those opposite will recall from their previous engagement in environmental assessment processes. A referral under the EPBC act was lodged by Chevron in April 2008 and the environment minister and his officers have been working closely with the WA government since that time.
The interjection went to the roles of government. There will be three sets of regulatory roles, the first of which involves an act of indemnification that is actually unprecedented in the country. Therefore, the decision taken conjointly by this government and the WA Liberal government to indemnify the project against CO2 sequestration liabilities long term has in fact been one of those factors which has underpinned this decision. This is what the government has embarked upon in its support of these resource projects. As I indicated to the House yesterday and the day before, there are other LNG projects alive not only in Western Australia but also in Queensland as well as off the Northern Territory. The government will continue to work positively, proactively and constructively with each of these major companies because it is all about long-term development of Australia’s infrastructure and long-term development of Australia’s jobs.
These development projects also dovetail with the government’s long-term strategy of nation building for recovery and nation building for the future—nation building for the future and what must be a building decade for Australia, a building decade which involves not just the investment and public infrastructure—the roads, the rail, the ports that we need for the future as well as the high speed broadband—but also, in conjunction with our partners in the private sector, the long-term rollout of private sector infrastructure; hence, why we have developed Infrastructure Australia and hence its role in working out long-term plans for the proper provision of public infrastructure in Australia necessary for long-term productivity growth and, equally, to learn from the lessons from the past through the development of Skills Australia to work out the long-term skills needs which this economy will need, particularly given the tens of thousands of jobs which will emerge from these resource projects over time. We should be mindful of the fact that inadequate planning in this respect in the past led to excessive inflationary pressures through a failure to plan for long-term infrastructure and skills needs in the economy. That is the howling lesson from the end of the nineties through until the middle of the first decade of this century.
We must learn by that. That is why the government is committed to a building decade ahead. That is why we intend to get on with the business of partnering with the private sector in advancing the Australian national economic interest. I would suggest to those opposite that they get with a national interest argument here, back the government and back the private sector in getting on with the business of building Australia’s economic recovery for our long-term future.