Interview on Sky News The Latest with Laura Jayes
South Australia’s energy security; Australia’s energy mix; Making child care more affordable, accessible and fairer

Laura Jayes:   Joining me now is South Australian Senator Simon Birmingham, and also the Education Minister. Minister Birmingham, thanks so much for your time. First of all I’ve got to ask you about what is going on in South Australia? The Federal Government is articulating day after day what the problem is about energy security, particularly in South Australia since we’ve seen blackouts every month since December and that big one in September. We know what the problem is; what is a solution?

Simon Birmingham: Well we’ve absolutely seen what is a terribly embarrassing situation, and as a South Australian I’m embarrassed that our state is in many ways the butt of so many jokes around the country now, and it’s critical that these issues are addressed. Now, Josh Frydenberg, after the big blackout that occurred last year, convened a meeting of all of the nation’s energy ministers to try to get everybody to cooperate on some solutions, and some action was taken there to ensure that there were at least two gas-fired power stations available and operating at all times, some other changes to some of the market rules, but clearly more needs to be done. The real challenge though is South Australia is built with its own separate ad hoc renewable energy target, a huge reliance on intermittent power sources that undermine the reliability of the generation grid, and …

Laura Jayes: [Interrupts] But hasn’t the federal energy target as well, renewable energy target set under the Abbott Government actually created part of the problem in South Australia as well? Because South Australia has got the right environment for wind farms, so essentially what’s happened over the years is there’s been a pooling of wind farms and investment that has gone to South Australia, and the State Government down there has accepted and acquiesced to that.

Simon Birmingham: Well our Government, of course, actually reduced the scale of the renewable energy target. So it was on track to be hitting a much higher level, and 18 months ago we pulled that back to an extent. Now, yes, that’s created some financial incentives around the place, and including in SA, but the South Australian Government over many years now – they’ve been in power since 2002 – have relentlessly pushed an agenda of seizing as much of that work as possible, of having a higher target, a 40 per cent-type renewable energy target, and they’ve basically achieved that. That is the power mix, the generation mix in SA.

Laura Jayes: Sure, but the Turnbull Government has hijacked this for your own political purposes – you might not put it so cynically. Jay Weatherill essentially admitted today that there needs to be more baseload power in the form of gas. So what is the solution here? Do we still have to rely on private investment, or is this something that the Federal Government, if it’s such an emergency situation that you’re talking about, needs to intervene on, perhaps use taxpayer funds to ensure that gas stability?

Simon Birmingham: We’ll have a look at whatever might be required, and of course we need the South Australian Government to show some leadership here. As I’ve been saying, they’ve got up to 40 per cent renewables. Yesterday generation from those renewables got down to 2.5 per cent, so it was a real crisis in a lack of generation capacity. That’s why after the big blackout late last year Josh Frydenberg, in leading the way, got the agreement that there will always be two gas-fired power stations available in SA to drive that type …
Laura Jayes: [Interrupts] So you don’t rule out further taxpayer investment in baseload power, another coal station, or the preferred option would be no doubt for gas?

Simon Birmingham: Well ever since Malcolm Turnbull spoke at the National Press Club a couple of weeks ago, it’s been clear that we’re eager to look at opportunities in cleaner coal initiatives …

Laura Jayes: [Interrupts] But clean coal is decades away, isn’t it? It takes as long as nuclear.

Simon Birmingham: But also importantly the option of energy storage capabilities, that if you’ve built all of this capacity in terms of renewables, how do you make sure you can store it when it’s generating lots – that you’ve got no control over – for the times when you need more.

Laura Jayes: How far away is a solution, do you think? You need to work with the State Government in South Australia, but are we still talking one, two, five, ten years before there’s a solution? Or will South Australians see these blackouts once a month?

Simon Birmingham: We’ll keep looking at how we can better leverage existing capacity, better leverage obviously the market operating rules to ensure we get maximum efficiency there, but we also need South Australia to say clearly what it thinks most effective, fastest, affordable solutions are to a generation crisis that is happening in South Australia, and which has now seen multiple blackouts in the state.

Laura Jayes: Bipartisanship is important though, isn’t it? Is that ever going to be achieved at a federal level in terms of stability for the energy market, security and attracting that public investment when Federal Governments barely hold on for a term – well, you did hold on, but …

Simon Birmingham: [Interrupts] Well we’re here, and I hope we’re here for a long time to come.

Laura Jayes: But even in two terms, even if it’s six years, and we’re changing from party to party every six years. I mean, where’s the stability in that? Who is going to invest when your energy policies are worlds apart?

Simon Birmingham: Well look, I think it is a real risk that Labor is out there with an ill-defined 50 per cent renewable energy target, unable to say …

Laura Jayes: [Interrupts] And you’ve ruled out an emissions intensity scheme. 

Simon Birmingham: … unable to say how that will actually be applied and so on. And now we’re going through with the Finkel Review, as well as an analysis of how to meet Australia’s future emissions reduction targets – appropriate bodies of work that hopefully will provide the grounding for ongoing sensible policy – and I just hope that when we do that and implement that as a Government, that Labor doesn’t come along and say, well, we’re still hell-bent on this 50 per cent renewable energy target, notwithstanding all the problems that are now evident from that type of approach. There was no modelling behind the 50 per cent target, there are no costings behind it, there’s no analysis behind it. Indeed, Mark Butler is kind of backpedalling a little bit from it as well.

Laura Jayes: [Talks over] There’s no reason for you to dump the energy target. Yeah sure, but all the experts have also told you that the emissions intensity scheme would’ve been the cheapest way to go.

Simon Birmingham: Well I’m not sure that all the experts were saying that …

Laura Jayes: [Talks over] Well, Alan Finkel, your own Chief Scientist.

Simon Birmingham: … there were people offering some opinions before the reviews had even started and commenced. We’ll actually do the right body of work, come up with something that is true to our principle that we also want to make sure energy is affordable in the future, not layer extra prices on it that just increase the cost and mean that, even if it’s running, pensioners sitting out there are saying it’s too expensive to run the air conditioners. 

Laura Jayes: All right, Minister, I do want to get into your portfolio area, and that is, well part of it, child care. There’s been a lot said about the cuts on the Family Tax Benefits Part A and B, but I just want to ask you about the paid parental leave system. So for the government subsidy, it’s gone from 18 to 20 weeks and you still want to basically have a top-up system for the private sector. So essentially you get 20 weeks, either at the minimum wage or what your company is going to pay. But what has the Government done to make sure that can’t be gamed? Because we have heard from the likes of Kate Carnell, saying that off the books companies might be able to say, look, we’ll still give you paid parental leave but we’ll give it to you in a bonus form when you come back, so therefore circumvent the system that you’ve implemented. 

Simon Birmingham: Well look, there are always of course people looking to game the tax system, game other programs, and we’ll always be making sure that compliance measures are put in place as effectively as they possibly can. There are companies already that pay bonus payments to encourage people to come back to work, to not just take 12 months or two years out of the workforce and then decide to tell the company they’re not coming back at all. So there are reasons why incentives and bonus payments exist for return-to-work arrangements. 

What we’re trying to do, though, is minimise, in a sense, the incidents where payments from the taxpayer are made that aren’t really necessary to provide at least a minimum fair level of paid parental leave for all Australians. The debate has reached a point where I think there’s consensus from virtually everybody that paid parental leave is an entitlement that working families should expect to receive, and that a minimum period of time, we think, ought to be 20 weeks, which is why we’ve increased the offering from 18 to 20. But we don’t believe that a government safety net should be there, applied to virtually everybody, rather than actually operating as a safety net where people aren’t already getting 20 weeks at full pay from their employer.

Laura Jayes: And how confident are you that you will have the support of the crossbench? Because Labor has ruled this out. This has been wrapped into an omnibus bill, which includes the child care measures. So how confident are you at this point?

Simon Birmingham: It’s disappointing that Labor has ruled out supporting this element because it’s a very progressive reform to improve, increase the amount of paid parental leave for the lowest income Australians …

Laura Jayes: [Talks over] Well they’d argue why is it fair that a single mother with a 17 year old in school loses $3000 a year. That’s what Labor is arguing, those individual points.

Simon Birmingham: So we can go to the child care changes and their interaction with the Family Tax Benefit, and really what we’re doing is bringing forward support for many families into the child care system to those early years where they’ll get more support for newborns, more support for children who are in child care. A family earning $80,000 a year with children in child care three days a week will be around $3000 a year better off, taking into account the Family Tax Benefit changes. So we’re really shifting that balance into those early years, helping families when it’s toughest, helping families to participate and choose how and when to work.

Laura Jayes: All right, well we’ll see when this passes the Senate. Minister, thanks so much for your time.

Simon Birmingham: Thank you, Laura.