Grievances - Energy Policy

18 October 2017

Debate resumed.

Mr WALSH (Murray Plains) — I compliment the member for Essendon on his contribution. It is amazing how empty vessels make the most noise. It was certainly 15 minutes of an empty vessel up there. The fact that he protesteth too loud about the member for Kew obviously shows that those on that side of the house think the member for Kew has a bright future in politics and feel threatened by him. The member for Kew came into this house at the same time as the member for Essendon. I notice the member for Essendon is still stuck in the back corner, whereas the member for Kew has actually started to raise his stakes in this particular place. My observation would be that that is a reflection of the value of the two members. One is still stuck in a back corner, and the other has taken on a shadow portfolio. I would also assume that obviously the Deputy Premier, the Minister for Education, feels threatened by the member for Kew as his shadow minister now, which is why he sent his little Shih tzu attack dog up there to run the grievance that we have had today.

I, like the member for Caulfield, grieve for all Victorians, particularly for the lack of leadership by the Premier and by the Andrews state government when it comes to energy supply and when it comes to the supply of reliable and affordable energy in this state. The Premier and his government have dropped the ball on one of the core responsibilities — making sure a state has a reliable and affordable supply of energy — and that is because they are driven by ideology rather than by common sense and by facts.

I think that was reflected in the 2015 budget, where you had a $250 million increase in the coal tax. Although there is absolute denial on the other side of the house that that had any impact on the closure of the Hazelwood power plant, it most certainly would have done so with the increase in coal tax down there and the way the Victorian renewable energy target was put in place. And it has led to high prices. It has led to high prices for both gas and for electricity and has led to the point where Victoria had a proud history of having affordable and reliable energy in this state and was a net exporter of electricity and we are now being told by reports that we are going to be a net importer of electricity and there is a risk of brownouts and blackouts, particularly in heatwaves.

The Premier stood on the other side of the table and said that power prices would not go up by more than 4 per cent. We now know that that was not true. Whether you say it is a lie or it is not a lie, that is an issue for conjecture, but it has now been proven not to be true, and we have seen some huge increases in electricity prices and gas prices in this state. We know the issues around gas availability and price and electricity availability and price. We had the Premier of Victoria going on the Insiders program last Sunday saying, ‘There is not a problem with our gas. There is not a problem with supply. There is sufficient supply’. There was I think a movie made years ago about the emperor’s new clothes, and I think we actually have a Premier with new clothes here who has been caught out in absolute denial about what is going on with energy, with gas and with electricity in this state.

I challenge the Premier to go to any number of the businesses that I will talk about in a minute who have got these huge increases in their gas bills and say, ‘There is not an issue with gas here in Victoria. What are you complaining about? Your prices might have tripled, but what are you really complaining about? There is not an issue here in Victoria’. We did go out with the shadow minister for energy and resources and with the Leader of the Opposition to Alba Cheese at Tullamarine to make an announcement about gas policy the other week. That business there is a great business. They are second‑generation cheesemakers employing 50 people, and they have recently had a government grant for, I think, $400 000 to actually grow the business and employ more people. Their gas bill used to be less than $10 000 per month. Their gas bill is now more than $25 000 per month.

The Premier really believes there is not an issue with gas supply and price here in Victoria. Let him drive. It is not far. He does not have to go into country Victoria. I know he does not like going out into country Victoria, but he could actually just go out to Tullamarine and could talk to the people at Alba Cheese and see what has happened with their gas bill over that time.

I commend the shadow minister for energy for the policy that he brought forward around actually doing something about gas supply here in Victoria. I think it has been talked about for a long time, and it was something that we signalled in the debate in the upper house a number of months ago, but it has now been formalised. We would not have a moratorium on onshore conventional gas here in Victoria; we would actually give farmers, the landholders, a share of the royalties — 10 per cent of the royalties the government would currently receive from those gas developments if they came to fruition — and we would give farmers the right of veto to say that they did not want gas exploration on their land if that is the way they feel. That would then also lead to a more informed discussion between the gas companies and the landholders there.

More importantly, as part of that policy we would actually have a gas reserve policy here in Victoria where new finds of onshore conventional gas would actually be reserved for Victoria first. I think that is a big step forward and something that needs to be done in this particular state because we need to protect Victorian jobs.

The happy family of the Labor Party is probably not as happy a family as it used to be, because I noticed old Blackout Bill there in Canberra is actually in favour of the things that we are talking about. It is a pity he would not pick the phone up and talk to the Premier and get some change there.

The lie ‘There is no issue about gas here in Victoria’ was perpetrated further yesterday by the Minister for Energy, Environment and Climate Change, who went on the record in Hansard during question time, saying:

Let us set the record straight. There are no current proven or probable onshore gas reserves in Victoria, and even if some gas were to be found, anyone who works in the industry knows that it would take at least five years to bring gas to the market — five years!

The day after we made our announcement, Roland Sleeman, the CEO of Lakes Oil, was out in the press, saying, ‘If you get rid of the moratorium in Victoria, we could have gas into the market within 12 months’. That is someone in the industry that actually knows what they are doing, compared to a minister who has absolutely no idea what she is doing in her portfolio.

There is light at the end of the tunnel, because a lot of businesses I talk to are saying that the current gas prices and the current electricity prices are the reality for the future. We are not going to be in business for the long term here in Victoria. So we have actually got a minister saying, ‘No, there is no gas; don’t look here’, and we have got a Premier saying, ‘There is no issue with gas supply’. We have also got one of the leaders in the industry saying, ‘You take the shackles off, you let us go and do the work that we do and do exploration for onshore conventional gas’ — this is not about fracking; this is onshore conventional gas — ‘You let us do that, and we will actually have gas in the market within 12 months’. I think that is true leadership by a company here in Victoria. That leadership is most definitely lacking from the government benches and particularly from the Premier.

One of the services that is absolutely critical to all our country communities is our country hospitals. If you look at the increases they have in gas and electricity prices into the future, they are huge. They have a real risk of impacting on health services. Hamilton’s Western District Health Service is going to have a $360 000 increase in their power bill next year. Seymour Health’s power and gas prices will go up by $190 000 this coming year. In Horsham, Wimmera Health Care Group’s electricity costs have increased by more than $500 000. They are huge increases on those essential services that are there for our communities.

One of the great stand‑out companies of this state is Patties Foods down at Bairnsdale. If you eat a meat pie, there is no doubt that there is a very high probability that pie was made in Bairnsdale at Patties Foods. They employ 550 people down there and make the famous Nanna’s and Four’n Twenty pies. In recent times the cost of gas to them has gone up by 120 per cent — a 120 per cent increase in gas — and by 150 per cent in their electricity bill. The Premier says, ‘What issue? No issue. Don’t look here. We don’t have an issue with gas’. Go and tell Patties Foods why they are paying 120 per cent more for gas and 150 per cent more for electricity. That is because of the policies of this current government.

A great stand‑out business in my own electorate is Kyvalley Dairy, run by the Mulcahy family. Last week they won the business of the year award at the Campaspe Murray business awards — a dairy farmer, dairy processor and fresh milk exporter to Malaysia. Just recently they bought the Kiewa Country Milk brand from the Murray Goulburn debacle. They have had a more than 50 per cent increase in their electricity costs over that time. They are doing exactly what we Victorians want — they are employing more people, they are being innovative, they are a bulk exporter of fresh milk to Malaysia — but their power bills have gone up by more than 50 per cent. They are saying that is a huge challenge for them insofar as how they grow and how they employ more people over that time.

It is not just the opposition here in Victoria who are raising these particular issues. Peter Strong, the chief executive officer of the Council of Small Business Australia spoke about the issue around energy. He said:

This is the biggest business crisis I’ve seen in my lifetime …

when it comes to business here in Australia. He went on to say:

The GFC was managed and it affected everybody, but this is only Australia …

When it comes to energy prices we are the only ones that are silly enough to be doing the things that are happening here, and we cannot see a solution. It is a real challenge.

Price hikes of up to 120 per cent are hitting businesses, dwarfing the 20 per cent increases faced by households. It has been partly blamed on the closure of cheap coal‑fired power stations, including Hazelwood in Victoria and Playford in South Australia. Another key driver has been the high gas prices, partially due to a shortage of east coast domestic supply. So while the Premier says there is no issue, Peter Strong from the Council of Small Business Australia is saying there is a major issue when it comes to gas.

I might finish off on one of the other businesses, Gouge Linen and Garment Services in Shepparton. That small business delivers dry‑cleaning and linen services to a lot of businesses across northern Victoria. Their electricity prices are up about $100 000 a year, and their gas costs have gone up $200 000 a year — a $300 000 increase in energy costs for that particular business.

Wherever we go around Victoria we are seeing huge increases in electricity costs and huge increases in gas costs. There are very real risks and very real predictions that we could see blackouts or brownouts here in Victoria next summer. We know the issues around heat stress, particularly for the elderly, who need their air conditioners on when we have a heatwave. If we have a blackout, it could actually put lives at risk here in Victoria. We know what happens when we have a blackout. For those people that have food in their fridges, it all gets lost. Again, it is those who can least afford it who will be the victims of blackouts here in Victoria, because they will lose whatever they have got in their fridges. The elderly will not have the cooling that they need. With the costs going up, we are hearing reports of quite a few people who are older not having their heaters on in the wintertime because it is too expensive. That same argument will be there in the summertime when they do not have their air conditioners on when they should have them on. They will get dehydrated and they will get heat stress.

Mr Richardson interjected.

Mr WALSH — High electricity and gas prices are linked, despite what the minister for energy would say. They are explicitly linked when it comes to the generation of power from gas. We will find that people’s lives will be put at risk. There is a real risk of fatalities in this state because of a blackout. That all goes back to the policies of the Andrews government’s Victorian renewable energy target, the increase in coal taxes, the moratorium on gas exploration — they are why these things are happening.



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