Address, Victorian Chamber of Commerce and Industry

Speech
10 Nov 2021
Prime Minister

PRIME MINISTER: It’s great to be back in Melbourne. It is absolutely wonderful to be back here in Melbourne, as Melbourne begins its process, and Victoria begins its process of roaring back. When I think about Melbourne, I think about the roaring crowd at The ‘G, I think of the roar of the crowd at Flemington, I think of the hustle and bustle of the streets and the people in the cafes enjoying the wonderful city life that is Melbourne, and to see everybody back here this morning, many of you for the first time to be together again in this way, it is really, truly, tremendous to be back. Just as the roar of the crowd, whether it’s at The ‘G or at Flemington, we want to see that roar of the economy back here in Victoria, we want to see that roar of Melbourne as it ascends again and takes its place, and we see it drive once again, the Australian economy, as it so importantly does. So, it’s great to be here, and with so many people who make our economy tick here in Australia. 

To Karyn, President of the Victorian Chamber of Commerce and Industry, thank you for that very kind introduction. To Paul and everybody, I want to thank you.

I begin by acknowledging the Traditional Owners of the land on which we meet, the Boon Wurrung and Wurundjeri peoples of the Kulin Nation, and pay my respect to their Elders, past, present and emerging.

As we approach Remembrance Day, in particular, I also want to acknowledge, as I always do, our serving men and women of the Australian Defence Force and any veterans who are with us here today, and thank you for your service.

I am particularly pleased to be here with the Victorian Chamber - the premier business group for small and medium businesses here in Victoria.

To Paul Guerra and his team have done an extraordinary job, in difficult circumstances, bringing this breakfast together - and I want to thank you very much for hosting me.

I also want to recognise the many colleagues joining me this morning. Too many to mention, and they already have been, but I really want to thank Josh Frydenberg, my Deputy and very dear friend, for his strong economic leadership during the course of this pandemic. Alan Tudge is here of course, and Angus Taylor is here, Jane Hume and Tim Wilson. Here I go. Katie Allen is here, and I’m sure there are others here as well. Sarah Henderson is here, I can see, so thank you for being here with me today.

Can I acknowledge Matthew Guy as well, and thank Matthew for the important role he has played here in Victoria, of reminding everybody about where we have to go forward. We have to go forward in this state, and ensure we stay open, and embraces the opportunities that are before us.

As we gather this morning, the reopening and recovery of our Australian economy is proceeding at pace.

Just last Friday, the Reserve Bank confirmed that our economy is recovering rapidly, and as Josh reminded us yesterday the news of  business confidence I think backs that in.

Australia has done the hard yards through the pandemic, and especially here in Victoria, and especially those running small and medium-sized businesses.

I want to thank you for what you’ve done. Of course as a Federal Government, we’ve been pleased to do our bit, to play our role through JobKeeper and many other programmes, but you’re the ones who’ve kept Victorians in jobs.

You’re the ones who’ve kept supply chains open and connected.

You’re the ones who’ve managed the heartache, and the complexity and the frustration of extreme lockdowns and restrictions and keeping your people COVID safe.

And you are the ones who are now opening your doors again.

I also want to thank more broadly the people of Victoria.

You have had to endure what no-one else in this country has had to endure during this pandemic. You’ve had the worst of it. You’ve endured the hardest of it.

And, now over 85 per cent of Victorians over 16 are now fully vaccinated.

The human face of reopening, I’ve been enjoying in these last few days since coming back - recovery and renewal is everywhere to see here.

You see it in the smiles on the faces of small business people, as they pull up the shutters in the morning on their deli, their newsagent or their coffee shop.

You see it in the hugs at airports, as families reunite across geographies and across generations.

And you see it in the really simple of pleasures. Friends catching up. Having a beer. Going to restaurants. Strolling around the shops. Getting a haircut.

It must never be taken from us again.

That is why I put the National Plan together. I also want to acknowledge the wonderful work of the Doherty Institute. A plan based on the best possible medical science, home grown here right in Melbourne, and economics to ensure we open safely and stay safely open. We’re not going back.

Australians have kept their side of this deal by getting vaccinated.

Governments, right across this country, must now keep theirs and return to Australians their freedoms.

So here we are.

One of the lowest fatality rates from COVID anywhere in the world, we’re now approaching one of the highest vaccination rates in the world, even exceeding the UK, on double dose, and one of the strongest economic performances of any developed nation in the world through the pandemic.

So, what’s next? What’s it all about now? What’s the big issue?

Our challenge now is to secure the economic recovery for all Australians.

That is what my Government is 100 per cent focussed on.

Only by securing our economic recovery can we restore our livelihoods and continue to guarantee the essentials that Australians rely on to support our Australian way of life - our health, our security, our jobs, our freedoms.

That is what is now at stake. And we cannot take it for granted.

Economic management matters more now than ever before.

The world remains a highly uncertain place.

The pandemic will continue to rage.

Inflationary pressures are re-emerging, putting upward pressure on interest rates.

Strategic competition between the world’s two largest economies, the United States and China, is reframing the global geopolitical landscape, especially in our region.

We need to keep Australians safe.

Supply chains are being disrupted and reformed, not always to our advantage.

And the global energy economy is transforming as the world responds to climate change.

Now, all of these forces have very real implications for Australia.

How we navigate these next few years, the choices we make, as a Government, the choices Australians make as a people, will have a major impact on our future prosperity and indeed the security of our country.

But you know what, I’d rather be us, here in Australia, than anywhere else in the world. As always we have reason to be optimistic. It is our country’s nature, and I can assure you it is my nature.

In its latest economic forecasts, the RBA projects the Australian economy to grow strongly by 5.5 per cent, you didn’t hear me wrong - 5.5 per cent by 2022.

And the unemployment rate, as Josh constantly reminds us rightly, is forecast to decline to four per cent by the end of 2023, the lowest rate since August 2008. It is currently 4.6 per cent, down from 5.7 per cent when we came to Government.

We’re not there yet. There is still a big job to do. But I am very confident that with your enterprise, combined with the continued right policy settings we will continue to secure our economic recovery and Australia’s future.

Today I want to speak more about one of the single largest economic challenges our country will face in the decades ahead. And, there are many, and there will be many opportunities to discuss those as well on other occasions.

But, today I want to focus on this: How we respond to climate change, and the impact that the global response to climate change will have on Australia - that is a significant economic challenge.

These issues are not just about the environment. They will have profound economic implications.

There are great opportunities associated with these changes, but there are also great risks for Australia. It’s not a one way street.

Taking action on climate change is extremely important for the health of our planet.

Australia is doing its part and we will continue to do our part to achieve our target of net zero emissions by 2050.

Australia has already reduced our emissions by more than 20 per cent. Now, I’m not sure a lot of Australians know that. Our emissions are going down, not up. They’re down by more than 20 per cent. You may say to yourself, or others listening in, ‘Oh yeah, other countries, they’re doing so much better than that’. Not true, as Angus Taylor and I had the opportunity to share directly with them, whether it was in Rome at the G20 or at COP26, because a 20 per cent fall is broadly in line with what’s being achieved across the EU. But, it’s better than the United States, it’s better than Japan, it’s better than our Kiwi cousins across the ditch in New Zealand, in Canada and South Korea.

Australia’s emissions intensity has fallen since 2005 by 54 per cent. Now, that ranks Australia second only to the UK of all the G20 countries. I particularly enjoyed sharing that with my G20 colleagues when I was there.

While reducing our absolute emissions by more than 20 per cent since 2005, our economy has grown by 45 per cent, proving that emissions reduction need not come at the expense of economic growth. And, Angus will remind you this is at the same time we developed one of the world’s biggest LNG industries.

Our latest projections show that our emissions will fall by up to 35 per cent by 2030, and may well exceed that. But, what I do know it exceeds is the Paris commitment that we gave of 26 to 28 per cent.

A lot of people are making a lot of claims about what they’re gonna do about this. What I know is what Australia has done, and what Australia will continue to do.

Now, this is happening because Australians are making their own choices in this area, they’re not being told what to do by government or international bureaucrats overseas. That’s not the Australian way.

There is no better example, I think, than the fact that we have now hit three million rooftop solar energy installations in Australia.

Aussie rooftops are now the nation’s largest power station, reducing carbon emissions in 2021 by more than 17.7 million tonnes. And this will only increase more and more in the future.

More than one in four houses and many non-residential buildings have installed small-scale rooftop solar. And we’re adding up to 2,000 small solar installations every business day.

Now, some of you might have heard that I was in Rome and Glasgow recently for the G20 and COP26. A little bit went on while I was there.

The pandemic, our economic recovery and the global response to climate change, that was my focus in my engagement with leaders while I was there.

My discussions at these events, and indeed Angus’s, reinforced my core beliefs about how we, as a free, open and enterprising society, should approach these challenges.

You know, no one passed a law or introduced a tax or passed a resolution at the UN that led to the world developing a COVID vaccine. No one passed a law or introduced a tax for the world to move from analogue to digital. Google and Cochlear were not invented at a UN workshop or summit. 

Just as the animal spirits of enterprise have worked together with scientists and technologists to change the world in the past - and we’ve seen that here in this very city - through advances in medical science and digital technology, I am more than convinced they also hold the answer to solving the challenge of a decarbonised economy. 

If you don’t believe me, just follow the money. Boris made this point at Glasgow, in his opening remarks, $100 trillion of private capital pouring, pouring like a waterfall into climate technology solutions - that’s the big change between Paris and Glasgow, versus on a good day $100 billion from Governments, all going into climate finance initiatives.

In many respects, Glasgow has marked the passing of the baton from political diktats of targets and timetables, which have had their place and are necessary, to private enterprise and the millions of dispersed decisions, choices and flashes of inspiration that make up consumer-led technological progress.

Of course, summits have their place, I particularly have to say that in the middle of the Exhibition and Convention Centre. But we believe climate change will ultimately be solved by ‘can do’ capitalism; not ‘don’t do’ Governments seeking to control people’s lives and tell them what to do, with interventionist regulation and taxes that just force up your cost of living and force businesses to close.

‘Can do capitalism’, not ‘don’t do Governments’. I think that’s a good motto for us to follow not just in this area, but right across the spectrum of economic policy in this country. We’ve got a bit used to Governments telling us what to do over the last couple of years, I think we have to break that habit. It’s had its place, sure.

The issue in responding to climate change is no longer about if, or why or when, we’ve had that debate. It is all about the very practical question of how.

The world does not need to be punished for climate change, we just need to fix it. And it will be fixed painstakingly, step-by-step, by the entrepreneurs, by scientists, by technologists, by innovators, by industrialists, by financiers, by risk takers. That’s the Australian way. That’s the way I’ve been championing on the world stage. And, you know, like minded capitalist market based economics should be doing the same.

As Liberals and Nationals we have far more trust in those who will risk their own capital to bring about these innovations than Governments using your tax dollars to tell you what to do.

And I think Australians, after almost two years of governments telling them what to do through this pandemic, they’ve had just about enough of that approach.

That approach does not come easy to us as Liberals and Nationals. It just doesn’t. Every fibre of our being in many of the decisions we’ve had to take, it goes against our instincts, it goes against our grain, but it was necessary. But, what you can take from that is we’ll reset, back to letting our economy do the work and let those who drive it be able to do that work as quickly as we possibly can, because that’s how you’ll see the Victorian economy roar back to life. It’s not something, as I said, we instinctively do, and it’s not something Australians want to see more of in the future. I don’t believe they do.

As we work to secure our economic recovery and future, we must secure Australia’s place in this new energy economy.

Countries with net zero commitments cover more than 80 per cent of world’s GDP. And 90 per cent of Australia’s exports are to countries with net zero commitments. That of course is going to have an impact here in Australia. These are decisions being taken in other countries.

We can’t ignore the reality of this. We cannot just sort of wish it away.

Again, my time in Glasgow affirmed my belief that Australia can - and must - chart its own unique path for achieving net zero emissions by 2050.

Our geography, our demography, our resource endowments, our human capital, our export profile, so reliant on rural and regional Australia, all mean that our pathway will be quite different to relatively small, densely-populated, services-based advanced economies in the North Atlantic. Just because it works in the North Atlantic doesn’t mean it’s going to work in the Indo-Pacific, in countries in the same way like Australia and certainly not in the developing countries of our region who we do business with every day.

This is why we will continue to join others in opposing prescriptive deadlines for phasing out particular fuels or gutting our agricultural sector - demands that are disconnected from realities, our industries, and our people, particularly in rural and regional Australia.

Demands that are also disconnected from technology trends and the lessons of history, the economic development imperatives of so many countries, especially in our Indo-Pacific region.

The disruptions, price spikes and energy shortages many countries are now experiencing in recent times reinforce why evolution - not revolution - is the only sustainable approach to net zero - politically, economically and, then ultimately environmentally, because it gets the job done.

The Government’s Long Term Emissions Reduction Plan, with our target of net zero emissions by 2050, embodies this approach, building on successful policies and our record of exceeding our emissions reduction targets.

Under our plan, Australians do not have to upturn their lifestyles or our economy to reach net zero. We can make our own Australian way.

Under our plan, Australia will continue producing and exporting world-class resources, energy, manufactured goods and agricultural products, led by globally competitive businesses.

There are five principles that guide our plan.  They are:

  • Technology not taxes.
  • Respecting consumers’ choices, not telling them what to do with mandates. Trusting customers to make good calls, and trusting businesses and enterprise to respect their customer and their demands and what they want to pay for it, and ensure they can get that cost down to meet that demand.
  • Driving down the cost of a range of new technologies - many more horses in the race, as we like to talk about, Angus and I.
  • Keeping energy prices down with affordable and reliable power.
  • And, also being accountable for our progress. Australia reports every quarter, every gas, every sector, every emissions. The rest of the world has to catch up to that sort of transparency.

Together, all of these are designed to ensure that Australia can shift to a net zero economy in a way that does not put industries, jobs or regions at risk.

The focus of our plan is on driving down technology costs, not increasing the cost of alternatives, and accelerating their deployment at scale across our economy.

It is all about establishing Australia as a leader in low emissions technologies tied to our industrial strengths and our national interest.

We have identified our priority technologies and the stretch goals linked to those technologies to drive down costs. You want to know the targets that matter in achieving net zero:

  • Clean hydrogen - under $2 per kilogram
  • Ultra low-cost solar - under $15 per MWh
  • Energy storage - under $100 per MWh
  • Low emissions steel and aluminium - under $700 per tonne for steel and under $2,200 per tonne for aluminium
  • Carbon capture and storage - under $20 per tonne of CO2
  • Soil carbon - under $3 per hectare per year.

 

These are the targets that matter, because if you achieve those then you can achieve a decarbonised economy and you don’t have to sell your economy out to achieve it.

My colleague Angus Taylor launched the second Low Emissions Technology Statement at COP26, and I want to thank also and recognise the contribution of another great Victorian, Dr Alan Finkel. I think Alan is here with us today. Chair of the Technology Investment Advisory Council, which advises on these statements. I’ve been well advised by so many great Victorians over, not only my colleagues who are here in the room, but people like Alan who have just been tremendous, the Doherty Institute, Professor McVernon, who you know. But also people like Pat McGorry who have been tremendous advice to the Government. I can see Alan there. Great Victorians who have been tremendous in our national effort.

As well as driving down technology costs, we’re also enabling deployment of low emissions technologies at scale.

Yesterday, we announced the first national Future Fuels and Vehicles Strategy, backed by an expanded $250 million Future Fuels Fund investment.

This Fund will focus on four areas of investment:

  • Public electric vehicle charging and hydrogen refuelling infrastructure
  • Heavy and long-distance vehicle technologies
  • Commercial fleets
  • Household smart charging.

 

Practical things. We’re not going to be forcing Australians out of the car they want to drive or penalising those who can least afford it through bans or taxes. Those regulations and taxes hurt those who can afford it least, and they’re usually cheered on by those who can afford it most. I don’t think it’s fair. Rather, the Strategy will work to drive down the cost of low and zero emissions vehicles and enhance consumer choice.

Today, I’m announcing a further step beyond Glasgow and towards net zero, as part of our step-by-step Long Term Emissions Reduction Plan - aligned with our technology not taxes approach.

At present, around 75 per cent of the $20 billion of Commonwealth investment in low emissions technologies by 2030 is focused on supporting the deployment of near-commercial technologies. 

Some $13 billion of total financing is through the Clean Energy Finance Corporation (CEFC).

Analysis to inform our plan, including by organisations such as the International Energy Agency, show that a large share of the emissions reductions necessary to achieve net zero will come from technologies that are not yet commercially available. I made this point to Fatih Birol when I was with him in Glasgow.

For Australia to become a low emissions technology leader globally, we will need to continue to expand support for early-stage technology research, development and demonstration, that’s where we can play a role - to support the Technology Investment Roadmap stretch goals, by getting Australia within range of net zero and then to close the remaining gap through technology, not taxes.

To that end, the Government will establish a $1 billion Low Emissions Technology Commercialisation Fund within the CEFC, injecting $500 million in new capital with the balance $500 million to be sourced from private sector investors.

This Fund will address a gap in the Australian market, where currently small, complex, technology-focussed start-ups can be considered too risky to finance.

So, we’ll step in. It’s about supporting an idea, an idea that then gets to a lab, that then gets to a market, and then into your home or business.

The Fund will support Australian innovators to develop their intellectual property and grow their businesses in Australia, and is expected to earn a positive return for taxpayers. It’s a good bet.

It builds on the CEFC’s success as the world’s largest government-owned green bank. The CEFC has committed $9.5 billion across 220 large scale projects and 23,700 smaller scale transactions, driving an estimated $33 billion in new investments across the economy.

The Fund is very much in line with what Bill Gates has been talking about, and I met up with him also at Glasgow and compared notes on the technology challenges and opportunities that are ahead.

As Bill has observed this in the book that I asked my entire Cabinet to read, which they did, ‘We need to think about how to turn lab-proven concepts into ubiquitous products that people want and can afford to buy’. 

This, he notes, ‘will require a massive effort to fund hundreds of commercial demonstration projects of early-stage climate technologies’ - projects that are complicated, risky and expensive - and hard to finance.

So, that’s the approach we’re taking. It’s precisely the challenge we are responding to with this new Fund.

The goal is to deploy a blend of private and public finance and technical assistance on the road to net zero. 

We are seeing our technology-driven approach to reducing emissions play out right across the country, including here in Victoria, drawing on established industrial strengths and skills.

The Latrobe Valley has a long history as an energy producing region.

It is geologically suitable for producing hydrogen and storing carbon underground, while also being in close proximity to electricity and shipping infrastructure.

These advantages underpin the Hydrogen Energy Supply Chain project, a world-first pilot project supported by the Australian, Japanese and Victorian Governments - a project designed to safely and efficiently produce and transport clean hydrogen from the region, which again Alan has been closely involved in, Alan Finkel.

This is just one example of the opportunities available to regional Australia in the new energy economy.

We’re also working to secure the future of Australian manufacturing in a post-COVID, low emissions economy.

For the first time since 2009, manufacturing employment is once again topped a million jobs. A million Australians working in manufacturing. Under Labor, one in eight manufacturing jobs, gone. We’ve restored them, and we’ve done it through a pandemic and a global recession.

Our $1.3 billion Modern Manufacturing Initiative (MMI) is helping transform manufacturing businesses so they can scale up, translate ideas into commercial success and integrate into local and international supply chains.

Just two examples, I’m almost done.  

The Integration Stream of MMI helps manufacturers integrate products into domestic and international value chains and to enter new markets.

With $2.3 million in funding, the Victorian manufacturer Titomic is working to commercialise the manufacture of space vehicle parts using green titanium for Australia’s growing space sector and for overseas export.

Another Victorian-based company, Savic Motorcycles, has been awarded a grant under our Commercialisation Stream, to develop a range of affordable electric motorcycles.

It is on course to develop the first Australian designed, assembled and tested high performance battery electric motorcycle to roadworthy certification.

This nexus of government and business co-investing in low emissions technologies and products will be the key to driving growth in modern manufacturing.

Ladies and gentlemen, our Government’s technology-driven approach to reducing emissions it will have clear benefits and it will also have them beyond our borders.

Through the joint efforts that Angus Taylor and Alan Finkel have undertaken, Australia has negotiated a series of new low emissions technology partnerships with key partners - Japan, Germany, Singapore, South Korea, Vietnam, the UK and Indonesia - and we are close to concluding one with our great friends in India.

Our emissions reduction goals are also indistinguishable from our geostrategic challenges.

There are two aspects to this.

The first is that carbon credits that become an important source of income for developing countries in our region.

In collaboration with our partners in the region, including the Quad - the United States, India and Japan - we’re working to establish a high quality carbon credit scheme in the Indo Pacific, building on Australia and Japan’s existing efforts.

We can’t afford for the supply chains of the new energy economy to be dominated and held hostage to the geostrategic objectives of countries that do not share our interests, or have our interests at heart.

We are therefore progressing through the Quad specific proposals to forge closer partnerships between our economies to build competitive and reliable net zero supply chains that start with the production of rare earths and critical minerals.

At the Quad meeting in Washington in September, I announced that to accelerate that work we will host a Quad Clean Energy Supply Summit in Australia in the first half of next year.

It will be a unique opportunity, frankly for Australia to show off about what we’re doing in this area, but also to learn from our many colleagues and partners in the regions. High-level dialogue between the governments of Australia, India, Japan and the United States, and many other regional partners, as well as leaders in science and technology, manufacturing, mining, finance, risk takers, entrepreneurs. 

Tomorrow is Remembrance Day and one of the greatest figures in our history is the legendary General Sir John Monash.

Sir John was a soldier, as we know, and an engineer.

After War’s end - in 1921 - a century ago, he was made the first chairman of the State Electricity Commission here in Victoria.

In its day, it was a new industry, with technical challenges and it had more than its fair share of critics.

Sir John saw the potential of low cost and reliable power. For jobs, for households, for the regions, and for Australia’s future, and Victoria’s future.

The technologies have changed. The solutions of 1921 are not the same as 2021. For Sir John Monash, the engineer, he would have understood that.

But a century on, the challenge is similar, if the technologies may be different.

Innovating for our times. Building and creating a job boosting economy.

Keeping power prices down and ensuring reliability of supply - so that industry and households can have confidence.

And for our generation, it is to do this while keeping emissions down as we transition to a clean energy economy.

That is what we are doing, that is what our plan seeks to achieve. And, friends, that is how we secure Australia’s economic recovery, and Australia’s economic future.