Question

Prime Minister, Jennifer Westacott from KPMG. A question on energy. You recently made the point, when you were addressing the Canadian Parliament, that Australia and Canada have a lot of shared interest in uranium. Can you say something more about that comment and what you think that shared interest is?

Answer

Well I think ... that the similarities are fairly obvious. We both have large reserves of uranium, we have roughly equivalent sized economies: Canada's is larger than ours, but not all that much larger. Each of us are developed countries and each of us therefore has a very direct influence in the nuclear fuel cycle. And there's a body still fairly embryonic in its form being put together largely at the instance of the United States and the other nuclear powers which we will have to watch very carefully to see that it doesn't in any way impact negatively on countries like Australia and Canada.

I mean, we have large reserves of uranium and therefore we're very much part of the nuclear scene, but under the Nuclear Non-Proliferation Treaty to which both of us adhere, we're naturally not nuclear powers. And we have no aspiration, let me say, to become nuclear powers. But we have a very big interest in any arrangements that might have the consequence of shutting Australia out. It was in that kind of context that I mentioned that issue when I spoke to the Canadian parliament. I'm not suggesting that there is any malevolence on the part of other countries. But - to use that wonderful expression - we want to avoid any unintended consequences of other arrangements. And we have an interest, because of our similarities, in doing so.

Question

Mr Prime Minister, Steve Cavanaugh from GHD. GHD has something like 450 engineers and scientists that work in the environmental field, numerous others in water and energy, and it's a very creative environment. Unfortunately a difficulty we have - and this is my job - is how to get that creativity into the marketplace. Just very quickly an example recently: we responded to a tender, a water tender in this state, and we came up with an innovative solution. It saved 43 gigalitres of water a year and it cost less than a quarter of the successful tender, but it wasn't compliant with the tender, although it achieves all its objectives. When we asked why, when you save so much water and save so much money, they said well the feds are paying for it all anyway, so it doesn't matter.

Answer

Who's paying for it all?

Question

The feds.

Answer

The feds?

Question

You, sir.

Answer

Me? Give me the name of the agency please?

Question

The point is that they had a view of how things should be done: we came up with an innovative and creative solution that actually saw water being piped to one our largest inland cities as well, plus a whole lot of other creative ideas and saving and water and money, but it was not accepted. I find there's lots of issues like this with three tiers of government, supposed probity … The question is, Mr Prime Minister, you talked about innovation, I think innovation and creativity is the way we're going to get forward in these. What environmental issues, what will you do with our institutions, what incentives can the Federal government provide?

Answer

Well, it takes a while to answer that. Look, I would be very interested in - seriously and I do mean this seriously, if you would like to provide me with some of those - I'm interested in all of these field experiences that people have.

Question

We have a number of them like that, sir.

Answer

Look the most valuable incentive we can provide in both the energy and water markets is to introduce the disciplining of the market. The best thing that we've done in relation to water is to start treating it as a scarce and tradable commodity. John Anderson, when he was Deputy Prime Minister and in charge of these matters, did a terrific job in getting the National Water Initiative together. And it was really built around the idea that entitlement for water should become a tradable thing: you should have a title to water and you should not lose that without proper compensation, and you should be able to trade it. Just as the river systems of Australia flow across state borders and the Great Artesian Basin has no regard for state boundaries, so we need to have a national system. So I mean, that's the greatest incentive of all, and if we can get the disciplines of the market into many of these areas that will make an enormous difference.

Question

Good afternoon Prime Minister, John Clarke from ANZ Infrastructure Services. Around two years ago, your government provided a capital grants and production credit to assist in the development of the biodiesel industry. It was therefore very disappointing that after a number of industry participants invested over $100 million worth of biodiesel production plants, many located in regional Australia, that the recent fuel tax excise reforms have effectively clawed these production subsidies back. There was a common agreement in industry participants that these changes are materially adverse to the fledging biodiesel industry and a U-turn to previous government commitments. Given the increasing concerns on environmental sustainability, energy pricing and energy security of supply, why was this recent legislation drafted and passed in this way?

Answer

Well I don't entirely accept your depiction of what happened. Biodiesel will always be, in terms of excise treatment, will always be preferred and favoured over petroleum. It was ... even by 2015 when you have fully phased in the taxation of commodities such as ethanol, it will still only be half the excise on petroleum. I think what you're talking about is that when we introduced, under the Energy White Paper, the excise-free status of offroad use of fuel, the natural advantage because the excise on biodiesel was half the excise on fuel, the natural advantage that biodiesel enjoyed disappeared. Now I think it's a bit rich to ask us to reinstate something that removed an advantage because the thing against which it was competing has become excise-free And I just don't accept ... I'm sorry, I don't see what we did recently ... I mean what we did recently was not to alter the revenue status of biodiesel and petroleum. What we did recently involved a number of things, it involved the methodology by which you could claim back diesel fuel credits, previously you did it by a grants system and we enabled people to do it under their business activity statement.

What you're referring to, the disadvantage of biodiesel, is brought about by the fact that because certain usages offroad of fuel no longer attract excise of 38 cents a litre and biodiesel was being taxed at a much lower rate than that, therefore the advantage biodiesel enjoyed disappeared, and I don't think there's much we can do about that.

Question

Prime Minister, it actually affects on-road trucks of over 4.5 tonnes.

Answer

Yeah, but there's also the impact of it off road as well and I think that is the point that people have complained about. But I think, I mean whatever vehicle you're talking about, you would agree with me wouldn't you that if something is given a preferential excise treatment compared with another fuel and the excise, and certain usages of that other fuel are made excise free, of course the preference disappears.