Cathy McGowan (Indi, Independent) Share this | Link to this | Hansard source

My question is to the Prime Minister. Prime Minister, Australian Textile Mills in Wangaratta is facing a 141 per cent increase in energy costs, and the timber manufacturer D&R Henderson in Benalla tell me they will pay a million dollars more for electricity in 2017 than last year. There are over 20,000 people in Indi employed in the manufacturing sector, and the loss of these jobs is a very real threat. Industry is willing the parliament to get on with good policy, combining affordability and sustainability. While the Finkel review provides an opportunity to deliver long-term energy security, what practical steps will the government take to address the immediate impacts of ballooning energy costs and the demand for renewables, particularly in my electorate of Indi?

Malcolm Turnbull (Wentworth, Liberal Party, Prime Minister) Share this | Link to this | Hansard source

I thank the honourable member for her question. Regional communities like those that she represents contain the full spectrum of our economic life. Agriculture, manufacturing, mining, timber, tourism—every aspect of our economic life is represented in her electorate and in the electorates of other members representing regional communities here. Affordable and reliable energy is absolutely critical to ensuring that those businesses of which she spoke are able to continue to provide the jobs and economic growth that her communities need.

This is what the government is doing in the here and now. The biggest single impact on wholesale prices at the moment is the rapid increase in the price of gas. That has been driven by the shortages I spoke about a moment ago, because of misguided and reckless decisions made a long time ago by previous Labor governments both here and in Queensland to allow more gas to be exported than was available and of course, by the Labor government in the honourable member's state, to prevent the exploitation of onshore gas resources in Victoria. So we have taken the tough decision to put export limits on gas. It is not one we take any pleasure in doing, but it will ensure that there is sufficient gas for the domestic market. At the same time, we are accelerating reforms to the way in which gas pipelines are run, because, of course, we need to see more transparency so that the cost of moving gas around the country comes down. That is another key component.

We are also pushing the states to deliver on electricity market reforms. We have the ACCC, as the tough cop on the beat, looking at the way the electricity market operates the retail market. In particular, the honourable member would be well aware of concerns expressed by the Grattan Institute and others about the way in which retail margins have grown without any explanation or justification in her state of Victoria. At the same time, the honourable member asked about renewables. The key thing we need to have in order to make renewables reliable is storage, completely overlooked by Labor—to the best of my knowledge, no mention ever made of it by the Labor Party—and certainly overlooked by the Victorian Labor government and, most negligently of all, by the South Australian Labor government. We have put that on the map. Not only that, but we are going ahead with Snowy Hydro 2.0, which will add 350,000 megawatt hours of storage into the system—the largest introduction of pumped hydro in our history—all of which supports the increasingly distributed and variable generation of electricity, including in the electorate of the honourable member.