The Hon Jim Chalmers MP

Treasurer

The Hon Tanya Plibersek MP

Minister for the Environment and Water

E&OE
DOORSTOP
PORT AUGUSTA, SA
FRIDAY, 17 MAY 2024

SUBJECTS: Budget, Future Made in Australia policy, Northern Water desalination project, Peter Dutton’s Budget Reply.

KAREN GROGAN, SENATOR: Good morning, I'm Senator Karen Grogan, a proud South Australian, and delighted to be here at Sundrop Farms in the Upper Spencer Gulf this morning, which is Budget Week federally and we have the Treasurer, Jim Chalmers, with us to talk about this week's Budget. We also have the Premier, the Acting Premier of South Australia, Susan Close, Minister Tanya Plibersek, Environment and Water, and the State Treasurer, Stephen Mullighan.

This is a fantastic opportunity to have these people here together, working together on the opportunities that are available in South Australia and specifically in the Upper Spencer Gulf. The opportunities for a Future Made in Australia, for renewable energy, for manufacturing, are rife here, and it's great to have these guys with us today to tell us about the kind of things that are going on and answer your questions. Thank you. I'll hand over to the Treasurer. 

JIM CHALMERS, TREASURER: Thanks heaps Karen for having us here in the great state of South Australia. There's a lot to love about this place. Here at Sundrop, doing some truly remarkable things and the thing that we are especially grateful for here at this remarkable place in Port Augusta, is the way that they are producing food in the best possible way, but also the stunning act of foresight to invest in the future, whether it be energy, whether it be water, whether it be the best kind of agricultural practices and here, this combination of delivering in the here and now, and having foresight about the future, really is what we are trying to do with the 2024 Budget, which was handed down on Tuesday night.

Tuesday night's Budget was all about helping people with cost-of-living pressures at the same time as we invest in the future. A tax cut for every taxpayer, energy bill relief for every household, and also help with rent and cheaper medicines, and in other ways as well. An important part of that Budget was investing in the jobs and industries which will power the future of our cities and suburbs and regions like this one in every part of the Commonwealth.

Now, this is the first stop, having come out of Parliament late last night, this is our first stop after the Budget was released and there's a very important reason for that. Port Augusta was the first port of call because the regions have a big role to play in a Future Made in Australia. South Australia has a big role to play in a Future Made in Australia. Critical minerals and renewable hydrogen and agriculture, they have a big role to play in a Future Made in Australia. So we're pleased to be here to see - to spend time with Treasurer Mullighan and Acting Premier Close, but also to spend time with Steve and his team here doing some really quite remarkable things.

Now in order to get renewable hydrogen, in order to get critical minerals right and agriculture right, you need water and today we're making an important announcement, which is to invest with the State Government in the planning for the Northern Water desal project. We know from the desal that's happening here, what an important role desal can play in a Future Made in Australia and Tanya Plibersek, in a second, will run you through the Commonwealth's investment working closely with industry and working closely with the terrific Malinauskas Government here in South Australia.

I might just say a couple of things about the Opposition Leader's Budget Reply last night before I hand you over to Acting Premier Susan Close. What we saw last night wasn't a Budget reply, it was an unhinged and risky rant. What we heard from Peter Dutton was long on nuclear negativity and short on economic credibility. It was an unhinged and risky rant without any alternative solutions to the big challenges that we face as a country.

Nothing about helping people with their cost-of-living, nothing about investing in the jobs and industries which will power our future, and that's the contrast here. We released a positive, costed, a funded plan to help people with the cost-of-living and to invest in the future. All we got from Peter Dutton was the usual unhinged, nasty, nuclear negativity in the rant which he tried to pass off as a Budget in reply.

He didn't tell us how he will pay for $39 billion of extra tax cuts for the wealthiest Australians. He didn't tell us where the nuclear reactors are going to go. He loaded up on spending and then said that they would spend less because he hasn't come clean on his cuts to social security and Medicare like when he was last a minister for health in 2014. So, it was very, very short of economic credibility, very, very long on nasty, nuclear, unhinged negativity, that's what we've come to expect from Peter Dutton, but the Australian people deserve better than that nuclear negativity they got from Peter Dutton last night.

I'll throw you to Susan Close and then Tanya Plibersek. 

SUSAN CLOSE, ACTING PREMIER: Thank you, Treasurer, and how wonderful to be up here in Port Augusta at Sundrop Farms. One of the most sustainable farms in the world.

We are so grateful that the Treasurer and the Minister for Environment and Water have chosen to come to South Australia first after the Budget was delivered in Canberra. That is tribute to two things, I think. One is the very strong relationship that we in the South Australian Government have with the Federal Government. The other is that it is recognition of the way in which South Australia is addressing both the challenges and the opportunities that are represented by climate change.

With climate change we have to do two things at once. One is that we have to reduce emissions and we're doing that in South Australia to a remarkable extent. We are the world leader in intermittent supply of renewable electricity. A place like this demonstrates how well we are able to have industry off the back of our very strong renewable energy projects. But at the same time, we also need to get ready for the warmer and drier world that we are all starting to experience and that, above all, requires sustainable water supplies that are not climate dependent.

The Northern Water Project brings both of those together. Northern Water is intended to be a large desalination plant that will help fuel new green industry, both in the form of critical minerals but also production of hydrogen. It's also a recognition that we can't keep expecting to get water from the River Murray, nor from the Great Artesian Basin if we're going to be a truly green state in a truly green country.

South Australia was already the driest state in the driest inhabited continent in the world, and then came climate change, and while we see the intense weather activities that occasionally can result in flood, we know that the overall trend is towards drying and that we need to get off our dependence on climate-dependent water and if we're going to industrialise in this new carbon, zero carbon future, we're going to have to do it by using green energy and desalinated water where there isn't sufficient supply.

Today's announcement that Tanya Plibersek will shortly go through, is the Federal Government's support for the next stage of investigation. South Australian Government has already committed at least $85 million to this next stage which will prove up the credentials of Northern Water, economically and environmentally, ready for a decision towards the end of 2026.

This project is expected to be transformative, not only for this region, although primarily for this region, but in fact for the whole of South Australia. It will unlock more copper mining capability, copper that is essential to the green industrial transformation, essential to the way in which we're going to have electric vehicles in the future. It is also going to be significant for South Australia and for all of Australia in representing that Australia recognises the reality of climate change, accepts its responsibilities, and is the marketplace to be if you're interested in investing in a green economy. That's what we're intent on in South Australia and that's what is so well complemented by the Treasurer's Budget and by the actions of the Albanese Government. I'd like to invite Tanya Plibersek to give us some more detail about the specific announcement they're making today. 

TANYA PLIBERSEK, MINISTER FOR ENVIRONMENT AND WATER: Thank you so much, Acting Premier. It's wonderful to be here with Senator Grogan, the Federal Treasurer, the State Treasurer and with you as Acting Premier. I'm very excited to be here today to talk about our next steps of cooperation on the Northern Water Project.

We know that this project could be transformative, both for industry in the area, and for the environment. The next stage is preconstruction work and further planning worth $230 million, and the Commonwealth Government today is very pleased to be able to say that we are contributing $65 million to that work. We will continue to work very closely with you in the South Australian Government and with industry to progress this project which could be absolutely transformative.

We know, for example, that green hydrogen is a very thirsty energy source. It requires reliable abundant water. We want to see copper development in this area as well, again, something that will require reliable water resources. And as the Deputy Premier made very clear, the alternatives here in South Australia are a continued reliance on water from the River Murray or from the Great Artesian Basin. Both of these sources are not as reliable as they need to be for industry, but they're also incredibly valuable environmentally. The fact that we've been overdrawing on these water resources has led to problems, both for the environment and for the communities that rely on these water resources for farming and for drinking and for other purposes.

So thank you very much to Frank and his team here at Sundrop Farms. It's been wonderful to see what progress towards a net zero economy looks like here on the ground in South Australia and it's exciting to be here with our state colleagues, taking these next steps on providing reliable quantities of water for the vital needs of South Australia.

STEPHEN MULLIGHAN, TREASURER: Thank you so much, Minister. It is so terrific to have you and the Federal Treasurer, Jim Chalmers, to be here with me, Senator Karen Grogan and the Acting Premier Susan Close, for this announcement. And I think it says a lot to South Australians that the Federal Treasurer would choose South Australia as the first place to come to make yet another significant funding commitment to our community to help our state make the most of the energy transition that is so clearly demonstrated where we are today.

To think 15 years ago we had a coal-fired power station, which has now been replaced, by something which is generating even more economic outlook for our state and doing it in a more environmentally responsible way.

The funding that's been committed by the Federal Government will be a massive boost to the efforts to bring the Northern Water Project to reality. This $65 million will mean that we can massively and rapidly advance the enormous amount of technical work that needs to be undertaken before this project can get to final investment decision. And if it wasn't for this funding from the Federal Government, then it would be so much harder to bring this project to reality.

So I can't thank the Minister and the Federal Treasurer enough for yet another substantial contribution to South Australia. This is a Federal Budget which has delivered in spades for the community of South Australia. Not just the substantial cost-of-living relief that we got on Tuesday night, of course, but also these further commitments on top of that which mean that our economy is best placed to grow more prosperously into the future. Any of us would be happy to take any questions you might have. 

JOURNALIST: This next stage of the Northern Water Project, $230 million, the Federal Government kicking in 65, the rest of the money, is that State?

MULLIGHAN: So a large proportion of it is from the State, as the Acting Premier Susan Close said. The State has committed at least $85 million towards these works, and we are also entering into agreements with those companies which are likely to benefit from the Northern Water Project, what we call those off-takers, people who are likely to use the desalinated water from this project to make a contribution as well. So amongst those three groups, Federal Government, State Government and those future off-takers, that's what's contributing to the $230 million. 

JOURNALIST: How quickly can this feasibility study get under way?

MULLIGHAN: Well, it is under way. It's already started. The State Government kicked its money in early so that we could get cracking as quickly as possible, really. But we're hoping to have all of this detailed work done really within about the next 18 months. We know that we want to unlock the extraordinary opportunities here in the Upper Spencer Gulf, but much further north for our state as well, particularly with the copper opportunity that Olympic Dam and BHP, its owner, is focussing on. So we can't bring this about soon enough, really, and today's funding announcement from the Federal Government really brings that forward for the state. 

JOURNALIST: Treasurer, have you been in contact with the State Energy Minister, Tom Koutsantonis after his meeting with Danieli overnight?

MULLIGHAN: Yeah, absolutely. I think what we heard on the ABC program today outlines some of the concerns and also the frustrations that we've got with what's going on at the steelworks at Whyalla. It is an absolute priority for this Government to make sure that the steelworks have got every opportunity for a prosperous future here in our state and, of course, the ongoing jobs of the hundreds of workers that those steelworks provides employment for. And I think you could sense the frustration in the Minister's voice, but also for the State Government more broadly that we would find out about this project delay by press release rather than by what has been a long record of close communication between state governments, of both persuasions, and GFG.

But nonetheless, we are making all of our expertise, all of our efforts and resources available to GFG to make sure that they can get their current furnace back up and running at full capacity, that they can get all of those workers more fully and gainfully employed and, of course, fully paid, because we want these steelworks to keep delivering what they have done for decades in South Australia and that is a significant contribution to our economy. But I think the Minister has also been reassured that Danieli is a good partner for GFG, or for anyone, indeed, around the world to be partnering with to deliver new technological advancements when it comes to steelworks operations.

JOURNALIST: Sorry, just one more for the - so in terms of the Danieli fallout, what has been the response? Obviously the Minister went there to see that things were on track. What did he say to you on the phone?

MULLIGHAN: Well this is not an issue of Danieli's making. This is an issue of GFG's making. So Danieli is willing and able to progress the project, of course, but its client is not the State Government. Its client is GFG. So that's why we're working so closely and so hard with GFG to make sure that they deal with the current damage at the existing steelworks, but make sure they're doing everything they can to reaccelerate the procurement of this new piece of critical equipment to make the steelworks not only more productive but more efficient into the future.

JOURNALIST: Just in terms of you talking up the Federal Budget and South Australia's share of that pie, obviously an announcement here today that was buried in the Budget, but in terms of the rest of the money for South Australia, there's been a lot of criticism from the business chamber, from are SACOS, about not being much tailored specifically to South Australia?

MULLIGHAN: I think that criticism is misplaced. This Budget has maintained the extraordinary contribution that the Federal Government is making to our $15.4 billion north-south corridors tunnels project. It's reaffirmed the tens of billions of dollars which will be coming to South Australia in the coming years for continuous ship building here in South Australia. And as you've heard from the Treasurer, every wage earner is getting a tax cut, every household is getting energy bill relief. I think this is a Budget which should be embraced by South Australians because not only, as the Federal Treasurer said, does it deal with the pressures that people are under right now, but it sets our state up very well for the future. 

JOURNALIST: Can I just grab the Federal Treasurer. Can I just pick up on the Whyalla issue, have you been keeping across the latest developments of the last two months of the steelworks with the plant being offline and where does the Federal Government sit on this issue?

CHALMERS: We're aware of developments. We see these as quite concerning developments. We know that there are some transitional issues there and we want to make sure that the workers are treated appropriately in the course of all of that. And I want to say how grateful I am to Stephen and the state colleagues here for the way that they are engaging in a considered and methodical way as these quite concerning developments play out. 

JOURNALIST: Can I ask you about the Federal Government's contribution to the new furnace, which is $63 million. What conditions are on that investment? Can you explain that to us?

CHALMERS: The key condition is that we help the town of Whyalla make this really important transition. If you look right around South Australia and, indeed, right around Australia, the Commonwealth Government has shown itself to be a very willing partner with states and territories and with industry to help make this energy transformation deliver for our people and deliver for communities whether they be urban, suburban or regional or rural. And that's what today is all about as well.

A centrepiece of the Budget we handed down on Tuesday night is to support the jobs and industries which will power our future. Whether it's investments in Whyalla, whether it's the investments in the Upper Spencer Gulf, they are all of a piece. We believe in a very prosperous future for Australian industry, we're prepared to play a role in attracting more private investment and you saw that in the Budget. 

JOURNALIST: Treasurer, what do you make of the criticism locally that there wasn't much tailored to South Australia? Obviously South Australians will benefit from the tax cuts and the energy relief, but in terms of specific announcements for South Australia, were we overlooked?

CHALMERS: Of course not. We are investing billions and billions of new dollars in South Australia. South Australia is central to a Future Made in Australia. The people of South Australia will be major beneficiaries of our budget. A tax cut for every South Australian taxpayer, energy bill relief for every South Australian household, rent assistance, cheaper medicines, and investing in South Australian industries, which are so important to the industrial and economic future of our country.

And in addition to that, as Treasurer Mulligan said, big new investments, whether it's the money that we are enthusiastically providing for South Australian infrastructure, whether it's the way that we're investing in the health system, housing is a really big focus of the Budget on Tuesday night as well. And that's because we want to work with state and territory governments, not against them. I can't say enough about the very positive way from Premier Malinauskas, Treasurer Mulligan, Deputy Premier Close, all the way through the South Australian Government, there is no better partner for the Albanese Government than the South Australian Government. We work very closely together to deliver the services, the roads, the healthcare, and the cost-of-living relief that South Australians need and deserve.

JOURNALIST: Can I ask you about migration and housing. The Coalition wants the permanent migration levels cut down to 140,000 people for the next two years to free up housing. Has the Government considered cutting back the permanent intake?

CHALMERS: The Government is cutting back the permanent intake in the Budget I released on Tuesday night. We come to these decisions in a considered and methodical way, not just when we're scratching around for something to say in a Budget Reply speech on a Thursday night. And this unhinged and risky rant that we saw from Peter Dutton was long on nasty negativity and short of economic credibility and one of the reasons for that is because he has left key questions unanswered about his changes to the migration system. You know, he has not been able to say, for example, what the impacts on Australian industry will be, industries like construction, agriculture, what the impact on our economy would be.

So the Albanese Government is already winding down, winding back the permanent migration program, and when it comes to net overseas migration, there will be half as many in the net overseas migration number next year than there were last year and that's because we're managing it in a responsible way, a considered way, and there the contrast couldn't be clearer with the unhinged, nasty negativity we heard from Peter Dutton. 

JOURNALIST: What do you think of Peter Dutton's claim, though, that he can free up 100,000 homes with that policy?

CHALMERS: A couple of things about that. One of the reasons why we spend so much time and effort fixing the migration system is because we inherited the migration system that Peter Dutton oversaw as the minister. And for two years now we've been getting the migration system in a better condition because of the mistakes that he made and the neglect that he showed when he was the minister.

So he's not awash with credibility here, not economic credibility, not credibility of any kind. He has come up with a number, plucked the number out of the air, to try and come up with and scratch around for something to say in a Budget reply. He needs to tell us what's the impact on the economy? What's the impact on the construction sector? What's the impact on agriculture? I don't think he's thought it through. 

JOURNALIST: But when it comes to housing, could that potentially free up 100,000 homes or do you dispute that?

CHALMERS: Well, the best way to provide more homes for Australians is to build more homes and that's why one of the biggest priorities of the Budget on Tuesday night was an extra $6 billion as part of a $32 billion package to build more homes for Australians, to make it easier to build and rent and buy. One of the reasons we have a housing shortage in this country is because we had a decade of neglect and we're doing what we can to turn that around. There's no quick fix. It requires a lot of investment from the Commonwealth. That's happening. It requires goodwill and action from state and territory governments, that's happening, too. We're training more workers, construction workers and builders with fee-free TAFE, a new investment in the Budget. That's how you build more homes for Australians, not just by plucking a number out of the air when you're scratching out for something to say in a Budget reply. 

JOURNALIST: Just on Peter Dutton not backing tax credits for billionaires. Do you think the green hydrogen industry will be able to survive without a government subsidy?

CHALMERS: I don't think he has the faintest idea what the future of our economy looks like. This guy has spent his whole career splashing around in nasty negativity and has no economic credibility as a consequence. He hasn't thought through any of these issues, he has no idea of the kinds of remarkable things that are happening in Australian industry as we transform our economy and make the most of this net zero transformation. And so he hasn't thought through his opposition to our efforts to attract investment.

The Liberal Party used to believe in investment, and they used to believe in tax incentives, and they used to believe in creating jobs in the regions and around Australia. They don't believe in any of those things anymore.

The other point I'd make about that briefly is this: Peter Dutton was asked how would he take pressure off inflation right now and his answer was he would cut $14 billion worth of tax breaks, which don't begin until 2027 and that, I think, just demonstrates that he has absolutely no idea about the economy. He didn't tell us how he'd pay for his policies. He loaded up on spending and that's because he has no economic credibility whatsoever. 

JOURNALIST: Just a follow-up there, though, the Opposition obviously would oppose the incentive plan. Are you confident that you can now get the Greens to agree?

CHALMERS: Look, I take nothing for granted in the Senate. I've learned to only pocket an outcome in the Senate once it's happened, but we will put all our efforts in. We've got great senators like Senator Grogan here, who will work as hard as we can to make sure that we land this package.

This package is crucial for the future of Australian industry. If we want to create the good, secure, well-paid jobs in industries which will power the future of our economy and deliver a new generation of prosperity in regions and suburbs and cities, then we need to play a leadership role and that's what we're prepared to do. We expect, of course, the usual economic vandalism from Peter Dutton and Angus Taylor and we will work to secure the support of the Senate to deliver this package that we announced and fully costed and funded. 

JOURNALIST: But do you think green hydrogen can spur itself along without government help?

CHALMERS: I'd be worried about the future of the industry without a government which believes in it, and this government believes in the prospects and the prosperity which will flow from renewable hydrogen, from refining and processing critical minerals, and from investing in our research base that will deliver the kind of clean energy manufacturing that we can be really amazing at, if we put the effort in. And again, I draw you back to the attention of this place here, the remarkable foresight that said we can get us along the path of net zero, we can make ourselves more water efficient, more energy efficient, employ people and create great jobs. This is a real inspiration for us. This is the sort of thing that we want to do nationally. 

JOURNALIST: There's a huge focus on the Spencer Gulf at the moment, all the different Future Made in Australia projects. The President of the Local Government Association of South Australia has welcomed millions of dollars that was invested, allocated towards upgrading regional and remote airports and airstrips. He's criticised the Federal Government not supporting or funding the subsidy for security screenings now required in regional airports. Whyalla has just lost an airline carrier because they now have to pay an $80 per head screening. What do you have to say to that?

CHALMERS: I think part of the answer is in your question. We made a big investment in regional airports and that's because we understand how important they are at connecting regional centres like this one and like Whyalla. We have shown an enthusiasm and a willingness to invest. Obviously local leaders would always like to see more investment in their local community, that's as it should be. People should put their hand up for more investment in their regions, but I think whether it's the Malinauskas Government or the Albanese Government, this part of South Australia has become a bigger focus, I think, than it's ever been before. In the conversations that we have with Premier Malinauskas, he is always raising this region, this is very, very front of mind for him and for us, and that's reflected in the sorts of investments that we're making. 

JOURNALIST: Treasurer, just going back to Peter Dutton wanting to ban foreign investors from buying homes for two years, do you concede it's a proposal the Australians would vote for?

CHALMERS: What matters here is whether or not he's thought it through, and he hasn't. There are already quite strict restrictions on foreign purchases of residential property, and we have taken further steps to dramatically increase the fees where that occurs. Again, a bit like the questions from your colleagues and counterparts over here, what we saw in last night's Budget reply was the kind of risky rant befitting an Opposition Leader who has no economic credibility. And, you know, at a time when we need a premium on responsible and considered and methodical economic management, instead, we just get these numbers and these half-baked ideas pulled out of the air. And that's what we saw last night. And whether or not it is appealing to people, is for the pundits and the commentators to determine.

Our job is to deliver the kind of responsible economic management which has become a feature of the Albanese Government and was a feature of the Budget on Tuesday night. Now if he really understood the pressures people were under, he would have focused on cost-of-living relief and getting inflation down, but instead, he focused on this kind of risky, unhinged, nuclear negativity which has become a hallmark of Peter Dutton over a long time in office. We might leave it there given the temperature in here. 

JOURNALIST: Sorry, just one quick question just in regard to the Government passing a fuel efficiency standards for cars overnight. Do you agree with arguments that it could drive up the price of cars?

CHALMERS: No, this is about giving people more choice and it's about making sure that the kinds of choices which are available to motorists in other countries are available to Australians, and that was a terrific outcome yesterday in the Parliament. I commend my colleagues, Catherine King and Chris Bowen and the Prime Minister for his leadership.

These sorts of standards have existed in other countries, in some cases, for half a century, and what it has allowed is a broader range of choice for people who want to drive more energy efficient cars. If you drive more energy efficient cars, you get your fuel bills down, and that's a good thing. Thanks.

ENDS