July 12, 2018








SUBJECT/S: ACCC report; Australian military spending


STAN GRANT, HOST: For our political panel this week, I was joined by Liberal MP Andrew Laming and Labor MP, as always, Anne Aly. Anne Aly, good to see you. Andrew Laming, thanks for joining us as well.


HOST: Anne, I want to begin with you on this. We have another report out into our energy sector - the ACCC. Why is it that, immediately, we get bogged down in this ideologically driven, heated, polarised debate about whether or not Australia, or how much Australia, should use coal. Why does it always go to that?

ANNE ALY, MEMBER FOR COWAN: Well, I think you need to be asking Andrew that, Stan. That heated debate is coming out of the Coalition, really, isn’t it?

HOST: No, but there’s an immediate pushback from Labor, Anne, to be fair. They say, “No, no, no - that\'s not going to happen.”

ALY: Well I don’t know where you’ve seen that pushback, Stan, because we’ve said that we’ll look at the ACCC report. Under this government - Malcolm Turnbull came in and promised everybody that their energy bills would go down by $550. In fact, they’ve gone up by $630. The biggest threat to energy at the moment is the uncertainty within the Coalition. We’ve said, very openly, we’ll work with the government on this. We’re not the ones that are stopping things from happening. We’re not the ones that are causing the delays. The delays are coming from within the Coalition, and their own ideological battle on renewables, on coal, on where the energy comes from.

HOST: Andrew, this always appears to be ideological, and certainly it’s been one of those issues that has been seen in that framework on your side of politics, isn’t it? It’s the conservatives versus the rest - you either love coal or you’re un-Australian...

LAMING: Well, there’s diverse views in the Coalition, Stan. That’s the characteristic of a small-L individualistic party like the Coalition is. We don’t have a party platform that we stick to and read from the script. So there are people who are pro-renewable in our party. I think as the NEG has become something you can look, feel and read about the game is now August, with the meeting of the COAG energy ministers, making sure they sign on. We’d love to see the acceptance that we’re seeing from Mark Butler and from Anne reflected in encouragement to their state colleagues to make sure there’s legs moving under the water to support the NEG. I can look after my colleagues in the Coalition. I need Anne to get the state energy ministers onside.

HOST: There you go, Anne - over to you.

ALY: In terms of - well, we’re from WA. I’m from WA. So WA has a very unique position on this. The ACCC report specifically is looking at those states that are on the grid. So certainly we’d been needing to look at the ACCC report in light of, and in the context of, WA’s unique position in terms that we’re not on the grid, that we do have high solar uptake here in Western Australia. So I think it will come down to looking at the details, what’s best for Western Australia, and I’ll certainly be encouraging the state government here to do what’s best for all West Australians.

HOST: This is the critical question. What is best? What is the right mix? What can provide this baseload power in the cheapest possible way to the greatest number of people? Andrew, what’s your position on the role that coal should play in this mix?

LAMING: Well, are you asking, Stan, rather than a party position? That is that we have adequate numbers of coal-fired power stations that, if the market agnostically needs dispatchable power, those coal-fired power stations can be around for 20 years. We don’t need to sweat the building of new ones, we’ve got sufficient if they stay open and don’t close like Liddell in 2021. Second, gas-fired power’s coming along. And third, the NEG actually mandates that requirement. That’s the whole clever and elegant part of it - that if retailers don’t guarantee they’ve got that insurance of dispatchable energy to avoid what we saw in South Australia, they pay a big, hefty fine, and the offer-and-bid process is taken out of their hands, we secure the dispatchable, and they pay for it. So it’s an elegant design.

HOST: Can you provide, Anne, energy that is reliable and that is cost-effective without coal maintaining an ongoing role, an ongoing part, of that overall mix?

ALY: I think, if you look at what some other countries have done in terms of their transition to renewables, I think absolutely it’s doable.

HOST: In Australia? In Australia?

ALY: Absolutely, it’s doable. It’s doable, Stan. What it needs is political will and political vision, instead of political squabbling that’s happening at the moment within the Coalition, where you’ve got the Nationals wanting one thing... Andrew talks about the NEG – we’re not even anywhere close to the NEG because of all the squabbling within the Coalition government based on different ideologies, sceptics of climate change, all of these things. The biggest risk to energy certainty in Western Australia is this government’s lack of a vision.

HOST: And even the position that you outlined there, Andrew - and you’d be fully aware of this, and you did say this was a personal view, not a party view - but immediately, that’s going to get sections of your own party offside with you.

LAMING: Stan, it’s probably a hard question to say, “Can we get rid of coal altogether?” to Anne, even the most ambitious states are talking about a 50% Renewable Energy Target. It’s how fast we transition--

HOST: That’s the key question, isn’t it - transition? Is there a need to bring on more coal-fired power stations as something your party would like to see?

LAMING: At this stage, what the NEG says is that, if we look after the existing coal-fired power stations, provide an incentive to keep them running as long as they\'re required - together with hydro and gas-fired - then we don’t need to be building new ones simply by virtue of capacity. If a retailer decides to shut down a station or, in Queensland, where the government owns them, they close one down – there’ll be a problem. There’ll be big fines. It’ll be taken out of the hands of the retailers. And that will push further pressure on them to find it from elsewhere, hence the grid that connects all eastern states.

HOST: Andrew, I want to stay with you for another issue. We heard from Tony Abbott today talking about what we’re seeing playing out in Europe right now. We’re discussing this in our program, this question of just how much should other countries pay for their defence? Is the United States out there to pick up the tab for NATO? And for that, you could include countries like Australia. Tony Abbott is saying that Australia’s going to have to look at spending more, in fact - more than 2% of GDP. Is that reasonable now, given the shifts that we’re seeing in the world, and what Donald Trump is demanding of key allies?

LAMING: So we’re already at a pretty generous level, and Tony’s comments are utterly welcome about increasing that. But that has to be subject to a debate both in the community, the parliament, and our party room. Australia’s record now is exceptionally good, well-funded Defence Force, long-term contracts being led for major technology, ranging from frigates to the new boxer. So we’re doing the right thing. The US is not pulling back – but we’re facing challenges in the South China Sea - but I think what we’re doing at the moment is sufficient.

HOST: Where do you see this, Anne? If you’re looking at Donald Trump who’s saying to NATO “look, I’m not going to pick up the tab for this” as we heard after the summit with Kim Jong-un, that there were question marks about just how long the United States would maintain its troop presence in South Korea. Perhaps the Japanese are looking at that and saying “well I wonder how long they’re going to stay here as well”. The future of the nuclear umbrella that provides securities to those countries may be part of the mix when you’re discussing denuclearisation on the Korean Peninsula. And for Australia, tied to this security pact with the United States, does Tony Abbott not have a point here where he says well maybe we’re going to have to look at carrying some of this burden ourselves?

ALY: I want to go straight to Donald Trump’s position on NATO, because I think what he iterated in regards to NATO is very consistent with his position around alliances. I think it’s important to emphasise just how important alliances are to the US for both their soft and their hard power. They’ve been probably the only country in the world that has been critical to alliances, and for whom alliances have been critical to. But this is --

HOST: But there are questions about the maintenance of those.

ALY: Yeah, there are questions about those, because what Donald Trump is doing is consistent with what he’s done in the past since he’s been in office with other alliances. I think our role is to emphasise to the US administration - ultimately, of course, it’s their decision in the end - but we should be emphasising to the US administration just how important alliances are for international and national security.

HOST: Even if you have those alliances, can I just come back to that question about how much we should contribute? We’ve had to increase to get to 2% of GDP. We’ve increased defence spending by more than 50% over the past decade. But is it now a reality that you’re going to have to go beyond that - that we’re going to have to invest more in our own defence to maintain the strength of those alliances, because the United States - under Donald Trump - clearly is just not going to provide a free ride or to carry other countries?

ALY: I think it’s something we certainly are going to have to deal with, to be honest, Stan. I don’t know whether or not it means that we’re going to have to increase what our contribution is. I think what all of this is doing is really bringing or raising again the question of collective security and the concept of collective security upon which NATO - and other kind of alliances - is built. Basically, that you have a set of countries who agree on certain international standards, and the penalties in breach of those standards. It’s not a concept that hasn’t been challenged before. It has been challenged before. And its detractors - as you would know - argue that collective security is difficult to maintain if not all the countries are on board in terms of the dishing out of penalties. So I think we’re in a period now where we are in a state of flux, because there is a kind of unpredictability about what the US administration is going to do. We should be preparing for this with the understanding that this administration - under Donald Trump - is likely to withdraw from and continue to withdraw from alliances, as it has in the past. And we need to assess where we are placed strategically, particularly our role in the region and for regional security. We need to reassess Australia’s position here.

HOST: And at a time when we’re seeing increased military spending by other countries in our region - notably China. But China will have to be a discussion for another day, otherwise we’ll be here for another half an hour. Andrew, good to see you again. Hope to see you on the program soon.

LAMING: Good stuff.

HOST: Good to see you as always, Anne. Thank you.

LAMING: All the best. Thanks, Anne.

ALY: Thank you so much, Stan. Take care.