Interview on ABC Radio Adelaide Breakfast with Matthew Abraham 
SA’s energy security; Labor’s refusal to say how much their 50 per cent renewable energy target will cost; Reducing Australia’s debt and deficit; Future schools funding arrangements

Matthew Abraham: It is Breakfast with Matthew Abraham and it will be Breakfast again with Matthew Abraham and David Bevan when he re-joins us at the start of March after long service leave. He’s having a good time. I think he’s putting cat flaps in every door in the house and the cat’s refusing to use any of them.

Sarah Hanson-Young, Greens Senator, spokesperson on Finance and Trade. Good morning to you, Senator.

Sarah Hanson-Young: Good morning.

Matthew Abraham: Simon Birmingham, Liberal Senator, Education Minister, welcome.

Simon Birmingham: Good morning. I’m sort of chuckling away at images of David on his hands and knees with his head peering through a cat flap.

Matthew Abraham: [Laughs] Well, the cat’s enjoying it.

Simon Birmingham: [Laughs].

Matthew Abraham: Mark Butler, Federal Member for Port Adelaide, Shadow Minister for Climate Change and Energy, Federal President- National President of the ALP. Mark Butler, welcome to the program.

Mark Butler: Morning.

Matthew Abraham: I should say by the way, Mark Butler, that seeing you on television last night, my wife said you are going handsomely grey.

Mark Butler: [Laughs].

Sarah Hanson-Young: Ooh, the silver fox.

Mark Butler: Well, that’s lifted my spirits.

Matthew Abraham: Yes. And I said: well, what about me? And she said: you’re just going grey.


Simon Birmingham: That was a Valentine’s Day message for you, Mark, from Mrs Abraham.

Matthew Abraham: No, no, no.

Mark Butler: Better late than never.


Mark Butler: Send my fondest regards.

Matthew Abraham: Are you having work on your hair? I mean … or is it just natural?

Mark Butler: No, it’s just the natural process of aging.


Mark Butler: I’ve had grey temples for a couple of decades actually.

Matthew Abraham: Well, we’re all going grey in Adelaide with power prices. Liberal Senator Simon Birmingham, Education Minister, key member of the Turnbull Cabinet, do you think South Australians can justifiably say: we are sick of this, we are sick of – here’s the Prime Minister now saying we all live in a socialist paradise. Well, it sounds like he’s bagging our state yet again rather than coming up with a concrete solution. People are probably sick of the blame game and want solutions.

Simon Birmingham: Well, I think people absolutely do want solutions and so we are undertaking the work of trying to address some of the market issues. We did make sure after the state-wide blackout, through reforms, that there are two gas-fired power generators available at all times to try and deal with some of the issues that the excessive reliance on renewables and non-synchronous energy have created. And we’ve got the Finkel review looking at how we can better structure the market. We’ve opened up action in terms of the potential for investment in terms of storage capabilities, so things like pump hydro capabilities. These are real actions that we are trying to take to fix a problem. But it’s a problem that could only get worse if Mark and Bill Shorten get their way in terms of pursuing a 50 per cent national renewable energy target in future which they won’t even say and Bill Shorten just refused on AM to say how much that would cost or how it would be done. 

Matthew Abraham: Mark Butler.

Mark Butler: Well, this is the problem with a government in its fourth year. It really can’t say anything about the plan it has to renew our electricity system across the country, not particularly in South Australia. All it can do …

Matthew Abraham: [Talks over] They’ve got a lot to say about South Australia.

Mark Butler: … is [indistinct] the Opposition. That’s right. All it can do is criticise and oppose. It has no plan …

Matthew Abraham: [Talks over] But you’re now saying, you’re now saying, are you not, though …

Mark Butler: If I can finish, Malcolm Turnbull and Simon Birmingham talk about this sort of pumped hydro storage technology, well that’s been- research and development in that has been funded by the Renewable Energy Agency for quite some time, an agency they were trying to abolish until a few months ago. So that’s nothing particularly new. They’ve cut off the idea of an emissions intensity scheme in December which was recommended by everyone in the industry and every expert. All they’ve got really on the table is a plan to build new coal-fired power stations, including, I read in The Australian newspaper, one on the Lefevre Peninsula in the middle of Adelaide, which is just extraordinary.

Matthew Abraham: Do you concede that- you are now conceding there needed to be a proper balance of energy sources and that is a problem for South Australia?

Mark Butler: We’ve always said there needs to be a coherent national plan that deals with the retirement of our existing electricity infrastructure – three-quarters of which we’re told is already operating beyond its design life – and the replacement by new infrastructure that will deliver the best possible mix of electricity into the future.

Matthew Abraham: But we don’t have that, do we?

Mark Butler: [Indistinct].

Matthew Abraham: [Talks over] We do not have that in South Australia because we rushed head long into a 40 per cent renewable target – which we are at – and we … and the Government says it’s going to keep going. It wants to get the 50 per cent.

Simon Birmingham: And which Mark Butler wants to apply 50 per cent nationally.

Mark Butler: So Malcolm Turnbull will continue to try and drag South Australia through the mud and what we’ve been trying to do is point out some facts about this. All of the outages in South Australia over the past 12 months have been caused by storm damage to poles and wires or to transmission towers with only one exception and that was the outage that occurred last week. And that occurred because all of our gas generation that had been sitting there, costing hundreds of millions of dollars to build, was not switched on because the federal regulator didn’t order it to be switched on …

Matthew Abraham: [Talks over] But that’s not factually correct, is it?

Mark Butler: It is, it is.

Matthew Abraham: No, no …

Mark Butler: [Talks over] On Wednesday, on Wednesday …

Matthew Abraham: [Talks over] No, I’m not talking about Wednesday, I’m talking about this question of an email and we’ll have a report out today, it’s coming out in the afternoon, so they have learnt maybe to bring these things out after Question Time …

Mark Butler: [Laughs] There’s still a Question Time tomorrow.

Matthew Abraham: Yes. But previous email reports, including into the state-wide blackout, subsequent reports have looked at the question of renewables and the problem in trying to kick-start a system without synchronous energy.

Simon Birmingham: But Matthew, just a very quick quote from one of the recent AEMO reports on this, talking about wind energy: the growing proportion of this type of generating plant within the generation portfolio is leading to more periods of low inertia and low available fault levels. That’s what AEMO, that’s what the regulator is saying and that’s the factual quote from them about, of course, the problems that an excessive reliance on wind and renewables is creating within the grid and the instability it’s creating.

Sarah Hanson-Young: I just think …

Matthew Abraham: [Talks over] Sarah Hanson-Young, Greens Senator, spokesperson on finance and trade.

Sarah Hanson-Young: Doesn’t this just show what is wrong with the entire system? We’ve got a bunch of politicians bickering amongst themselves. You’ve got the Coalition using South Australia’s power crisis as an excuse and an example to beat up on their own, kind of, beat their own drum in terms of their own war on renewable energy. And South Australians don’t give two hoots about the ideological battle going on here in Canberra.
What they want is to be able to turn their lights on, have their air conditioners working in the sweltering heat and make sure their fridges are on. And to do that we need a proper plan and we need some proper analysis about how to deliver it. Storage options.

Matthew Abraham: Yeah, and you can see as a Green to do that, that a rush into a big mix of renewable energy without stable base load power is not enabling them to turn on their fridges, their air conditioners and their lights when they want them.

Sarah Hanson-Young: Do you know, Matt, I think the biggest problem here is that the market rules are rigged against renewable energy and being able to deliver those storage options. We’ve got a …

Matthew Abraham: [Interrupts] Sarah Hanson-Young, the market favours renewable energy. It’s subsidised $50 for the first- $50 a kilowatt hour. They then get $30 on the …

Sarah Hanson-Young: [Talks over] No, no it favours …

Matthew Abraham: … the extra – on the market and their power gets taken first.

Sarah Hanson-Young: [Talks over] No, it favours the big- no, it favours the big power companies who decide when prices are as high as they can possibly be that they’re going to deliver less so that they can cash in and make big profits. South Australians are being screwed by the big power companies. AEMO are not independent enough to have the teeth to fix it. Unless we fix the market rules, unless we have proper investment in storage, none of this is going to be solved. Pretending that you save South Australia’s power crisis by building a new coal-fired power station or just letting the big gas companies continue to reap massive profits is not going to solve the problem.

Matthew Abraham: Let’s move on to the economy and the decision by the Nick Xenophon Team to block a raft of savings measures. Simon Birmingham, is the Government now giving up on that and will it frame a May budget with tax increases or spending cuts?

Simon Birmingham: Matthew, we’re not giving up on anything. We’ve, since the election last year, delivered $22 billion worth in savings in our continual efforts to try to repair the budget damage from excessive spending commitments of previous years. And we’ll keep working hard at that, and we’ll keep working to try to convince the Xenophon Team or others in the crossbench, or the Labor Party or the Greens to support savings and …

Matthew Abraham: [Interrupts] Okay. But are you considering either making a temporary deficit levy permanent or increasing- as Nick Xenophon suggested, a slight increase in the Medicare levy for everybody?

Simon Birmingham: Well, I’m not going to foreshadow budget decisions that certainly haven’t been taken yet and about which I’m not directly a player in terms of the decisions of the expenditure review committee of Cabinet and how that frames the budget. But I do know that we will absolutely fight as hard as we possibly can to try to get savings in place, to keep bringing down the extent of the deficit, which we have had success at to date. And of course, we’ve seen with the Senate over time and we did late last year that there will be occasions where it looks like there’s no hope but then we’ll find a breakthrough mechanism and we will actually achieve many of the things that we want to do.

Matthew Abraham: Yeah, but would it be crook to increase taxes at a time when you’re expecting a $30 billion windfall from iron ore, the rising iron ore price?

Simon Birmingham: Well, all of those factors will of course be considered in the budget. You know, we have faced some of the lowest commodity prices on record, coinciding with the downturn in terms of the investment in the mining sector. Now we’re seeing the benefits of that investment in terms of increased exports, which is good news. There have been some recoveries in commodity prices, which is good news. The budget will reflect all of those matters, but we won’t be making the mistake of previous years and just living off of a boom period of time. We have to make sure the budget is sustainable into the future and that means taking a very cautious approach given the high fluctuation we’ve seen in things like commodity prices.

Matthew Abraham: Okay. Mark Butler, is there any movement from Labour’s camp on this? If the result of this – the Senate basically running the show now – is that we’re going to see either an increase in the Medicare levy, which would affect most people, or the temporary deficit levy which affects those on incomes over $180,000.

Mark Butler: Well, I hope this last 24 hours shows that the Government has finally given up on some of these cuts to low income families, to pensioners, to young people that they’ve failed to get through the Senate this week. These are cuts from the 2014 Budget – that infamous budget from Joe Hockey and Tony Abbott – and they’ve been really flogging this dead horse now for almost three years. So hopefully they have given up on these cuts that have been rejected so many times by the Senate and by the community so they’re returning maybe to a revenue question. 

Now we do have some ideas about that. First of all, we should be looking at a $50 billion tax cut that the Government keeps insisting on, almost $8 billion of which will go to the four big banks. That is simply not a priority for the nation and they should shelve that. We’ve got ideas about cutting back the negative gearing arrangements, which would be good for the budget but also give those young people trying to buy into the home market an even break as well. So we’ve had ideas out about how to get a better balance between revenue and spending in the budget for some time now. But this government has just been barrelling away on these terrible cuts that came out of the 2014 Budget.

Matthew Abraham: You’re listening to Super Wednesday on ABC Adelaide at 13 minutes to 9. Matthew Abraham with you. Sarah Hanson-Young, as Finance and Trade spokesperson, is the Government wasting its breath now trying to get these budget measures through? It’s going to have to increase taxes.

Sarah Hanson-Young: Look, I think the first thing the Government’s got to recognise is that the Senate is doing what the Australian people want. We’re standing up against the idea of making the most vulnerable pay for big tax cuts that the Government wants to give big business. And I just, got- as a point of reference, Government wants to give $50 billion to big business. Big whack of that is going to go to the big four banks. The Commonwealth Bank only yesterday posted a $5 billion profit. I don’t think they need any more help from the Australian taxpayer. 

So rather than blaming people who are disabled, which is where the Government’s going with this, rather than picking on the most vulnerable, how about we rein in those tax cuts for big business? How about we tackle negative gearing and capital gains tax? And what about that $4 billion the Government here, together with One Nation, got through the Senate to give the wealthiest Australians a tax cut last year? Four billion dollars.

Simon Birmingham: Well, it’s good to see the Labor Party and the Greens are sharing their talking points but seriously, and firstly – because Sarah wanted to just play the scare tactics then – we will fully fund the National Disability Insurance Scheme. There is no doubt about that. The point we’ve been making this week is that it can either be funded …

Sarah Hanson-Young: [Talks over] But you’re going to blame disabled people on the way through. Let’s see how that campaign goes, Birmo.

Simon Birmingham: … by higher debt, by higher taxes or by finding savings elsewhere, Sarah. That’s going- it will be funded one way or another but it can only be funded by higher debt, higher taxes, or finding savings elsewhere and our preference was to see savings delivered elsewhere.

Matthew Abraham: Okay.

Simon Birmingham: And that remains our preference.

Sarah Hanson-Young: It’s about priorities, and the Government wants to have the most vulnerable people pay, and the big banks are going to be given a tax cut.

Simon Birmingham: [Talks over] It is, and that’s why we want to fund the National Disability Insurance Scheme. That’s why we want to fund child care.

Matthew Abraham: [Talks over] Okay, now …

Sarah Hanson-Young: The big banks get a tax cut, and the disabled people have to pay.

Simon Birmingham: Labor and the Greens seem to think that Australia can just live in sort of an isolationist paradise and ignore the fact that company tax rates around the rest of the world are going down.

Sarah Hanson-Young: [Talks over] I don’t think Commonwealth Bank needs any taxpayer funding.

Simon Birmingham: That will of course make us a less attractive place for investment in the future, and if we want to actually keep creating jobs – jobs that generate taxes to support services, jobs that maintain our standard of living – we’ve got to be a competitive place to invest.

Sarah Hanson-Young: [Talks over] I’d be investing in schools, if that was the case. Let’s invest in schools and nurses. They’re jobs that Australians need.

Matthew Abraham: [Talks over] Okay, speaking- speaking of investing in schools, Mark Butler, coming to you. Shadow Minister for Climate Change and Energy. The Labor Party, certainly in South Australia, has been spending some $700,000 of taxpayers’ money on a- what is effectively a political front to campaign on Gonski at the last federal election and subsequently. We read this morning in the Financial Review that Ken Boston, who was a member of the Gonski review panel, a schools expert, has attacked Labor’s big-spending schools policy, saying its 4.5 billion promise to restore Gonski funding to schools will not solve the problems of Australian education. He said the Gonski report did not see additional funding as the key to improving Australian education. Doesn’t that gut your campaign for the letter of the law on Gonski?

Mark Butler: No, it doesn’t. With the greatest of respect to Ken Boston, it doesn’t, and Labor’s reforms to school funding did not pretend that money was the entire answer, but equally you can’t improve the performance of our school system without ensuring that there is proper needs-based funding arrangements in place.

Matthew Abraham: He says that Gonski was a fundamental reimaging of Australian education within the framework of existing and available resources, not simply an argument for more resources for schools.

Mark Butler: It was quite clear to us that the school resources standard, having that across the country meant that schools particularly in lower socioeconomic areas, particularly schools in regional areas with high Indigenous or disabled student numbers needed additional money, and that is the commitment that the Labor Party made when we were in Government. It’s the commitment we continue to make today, but it wasn’t the only commitment that flowed from those reforms. There was the National Curriculum. There was a whole range of other things that would …

Matthew Abraham: [Interrupts] Oh, yeah. But we hear about the dollar amount from Jay Weatherill here in South Australia.

Mark Butler: And we maintain the view that you need additional money put into our schools to lift the performance of our schools and give youngest Australians the best possible start in life. We don’t walk away from that at all.

Matthew Abraham: Simon Birmingham, is this a get out of jail card for you as Education Minister?

Simon Birmingham: Well, it’s just a highlighting of the facts. We’re providing record and growing levels of school funding, and we’ll keep doing that. There needs to be absolutely adequate levels of funding, and that’s why it’s at record levels. That’s why it’s growing. But as Ken Boston said, Bill Shorten, the Labor Party, when they implemented the Gonski reforms corrupted the Gonski reforms. They weren’t actually the Gonski reforms. It wasn’t the Gonski report that said there needed to be billions and billions of dollars of extra money. It said that it needed to be better distributed; needed to be better used, and of course they’re the types of things that we are absolutely focused on doing.

Matthew Abraham: Although Dr Boston, according to this, said the only reason the Gonski report had recommended an extra $5 billion a year be spent on schools because the then-Labor Government gave a guarantee. So it was in the Gonski report.

Simon Birmingham: Well, even then, it …

Matthew Abraham: [Interrupts] You just said it wasn’t.

Simon Birmingham: Even then, Matthew, what Bill Shorten went to the last election promising was far more than an extra $5 billion worth of spending on schools.

Matthew Abraham: [Talks over] But you said it wasn’t in the report, he didn’t recommend extra money.

Simon Birmingham: And as you rightly quoted Ken Boston, he said: the Gonski report did not see additional funding as the key to improving Australian education. Now, yes, they had their hands tied. He actually said that that commitment of Julia Gillard was an albatross around their necks. They were his words about how he saw the way that Gillard and the Government framed it, and of course it has created huge capacity for the states to engage in cost-shifting. 

We saw data just the other week that as we have handed millions of extra dollars over to the South Australian Government, they haven’t increased their funding for schools. They’ve cut their per student funding in instances, so it’s not actually seeing more funding going into the system overall in some instances, which is the real tragedy, and we will certainly be making sure in future school funding arrangements that any continued increase in federal funding – which is what we will keep delivering – must see real maintenance of funding levels by the state and territories too.

Sarah Hanson-Young: Look, I think part of the …

Matthew Abraham: [Interrupts] Just finally, Sarah Hanson-Young, quickly.

Sarah Hanson-Young: Look, I think realistically parents want to know how much money their school is going to get, and when you look at the figures, $1.5 million is going to be cut from Unley High School; 1.6 million from Adelaide High School …

Simon Birmingham: [Talks over] Nothing’s being cut from anywhere, Sarah. That’s an outright lie.

Sarah Hanson-Young: Well, it will be. Programs are going to be cut.

Simon Birmingham: [Talks over] Funding is going up each and every year in the future.

Sarah Hanson-Young: Which teachers are going to lose their jobs because of that? Which …

Simon Birmingham: [Talks over] That’s bullshit, to be perfectly honest, Sarah. Really. 

Sarah Hanson-Young: Well- no. It’s true.

Simon Birmingham: [Talks over] Programs are not going to be cut when funding is going up each and every year into the future. 

Sarah Hanson-Young: It’s- … South Australian schools …

Simon Birmingham: [Talks over] We might be promising a lower rate of growth than the Labor Party promised, which was completely unaffordable, but there is no cut to funding!

Sarah Hanson-Young: Birmo, be honest. It’s your own state. Be honest. It’s your own state. And South …

Simon Birmingham: [Talks over] No, you should start telling the truth, Sarah.

Sarah Hanson-Young: Be honest. It’s South Australian schools. You cut the money from the two last years of Gonski. South Australia …

Simon Birmingham: [Talks over] The South Australian Government will receive more money each and every year into the future.

Matthew Abraham: [Interrupts] Okay, hang on. Simon Birmingham, using the bullshit words. You’re pretty worked up there. I haven’t heard you … I didn’t know you were [indistinct].

Simon Birmingham: [Talks over] Well, this idea of running around saying that a school is actually going to lose money …

Sarah Hanson-Young: [Talks over] Let’s be hon- let’s …

Simon Birmingham: There won’t be reduced funding because we’re actually growing funding through $16 billion this year …

Sarah Hanson-Young: [Talks over] Well, South Australia’s never got- South Australian schools …

Simon Birmingham: … to more than $20 billion by 2020. That’s more- faster growth than inflation, faster growth than projected enrolment. The money will go to each of the states and territories.

Sarah Hanson-Young: [Talks over] Well, I’ve obviously got- I’ve obviously got under your skin, Birmo, and you know what, when …

Simon Birmingham: [Interrupts] Because you’re telling lies, Sarah.

Sarah Hanson-Young: No. When politicians don’t like the truth being told, that’s when they start getting rabbity(*). So let’s be honest about this.

Simon Birmingham: [Talks over] If you haven’t noticed, Sarah, you’re a politician too.

Sarah Hanson-Young: Hundreds of millions of dollars is going to be cut from South Australian schools.

Simon Birmingham: [Talks over] That is a complete lie.

Matthew Abraham: Okay, Sarah Hanson-Young, thank you Greens Senator. Simon Birmingham, Education Minister. Mark Butler, Shadow Minister for Climate Change and Energy. That’s Super Wednesday.