Josh Frydenberg – Gas and 457 Visas

Josh Frydenberg the Minister for Energy and the Environment talks to Ross about the outcomes from the gas meeting today, and 457 Visas

Introduction – Gas and 457 Visas

Ross Greenwood: Let’s now start the program by going to the Minister for Energy and the Environment, that is Josh Frydenberg. He is on the line right now. Many thanks for your time, Josh.

Josh Frydenberg: Nice to be with you, Ross.

Interview with Josh Frydenberg Minister for Energy and the Enviroment

Ross: Can I first start by talking about 457 visas? The reason for that is quite clear. The government has got a policy. Bill Shorten says it’s window dressing. It’s not much of a change at all. Can you just explain to me because the energy industry is one that has been extensive user of 457 visas, and also technology, the other one. Is this really window dressing? Is it going to really damage the ability for highly skilled workers to come into Australia?

Josh: Well, Labour is all over the shop in the terms of their response to major changes to the 457 system because Bill Shorten is saying it’s not a crackdown and his deputy leader, Tanya Plibersek, has just said on radio that it’s a sledgehammer. So it can’t be, not a crackdown and a sledgehammer at the same time. The reality is, there were significant problems with the 457 system as it existed and under Labour, they increased the number of people coming in by some two-thirds and under Bill Shorten, reached a record 110,000 people. So what we’ve done is abolished the 457 system and introduced two streamlined options.

Ross: Okay, with that streamlined options, we went through those last night with the Prime Minister. Is there going to be the ability, if there’s a shortage of labour or indeed we need to bring in the best and the brightest from overseas in a range of different areas, including into our universities, is there going to be an ability to bring those people in?

Josh: Well, clearly you can bring people in to the areas and to the vocations and jobs where those skills are needed and we are after mandatory labour market testing. You can’t get a qualified Australian to fill that role and that is why you have labour programs of this type and as you referred to in your introduction, there are some sectors, like in the resources sector, where it can be very valuable to have that skilled labour come in from abroad. But by and large, the list of occupations had grown so much under the Labour Party to include groups like dog trainers, driving instructors, goat herders, turf growers, B and B operators. I mean, you can’t tell me that those jobs can’t be filled by Australians first and foremost and that’s what we are seeking to do.

More migration

Ross: Okay, so the other aspect of this in regards to where we go with 457 visas into the future, it is quite clearly that you need to have the right people in the country at the right time. Now, it’s a crackdown and it’s one of those situations where it’s the confidence in the market place to make certain that those jobs — if we want more migration in this country, and we genuinely do and I believe this, you need younger, more highly skilled workers coming here that create the long-term tax base for our aging population. Would that not be a reasonable thing?

Josh: Absolutely. When the economy grows, you want to ensure that the businesses who provide the employment and the growth and the investment are able to get the best people, and by putting in place these new requirements that we have two years at least work experience before someone comes in on one of these new visas, that there are tightened English proficiency requirements, that there are criminal history checks, and that there is this mandatory labour market testing of the domestic market before you go and hire someone from abroad, I think it’s a common-sense approach [crosstalk].

Ross: Okay, Josh, just another one with you while I’m here. Yesterday when that announcement came out from the Prime Minister and from Peter Dutton, it was a surprise. It was a genuine surprise. Both sides of Parliament were surprised. The community was surprised. The media was surprised. Is this a new strategy from the government? Was this done quite deliberately? I mean, the cabinet held tight. It didn’t leak out. There was no work shopping of the idea to see whether it would fly or be popular. Is this actually a change in behavior or attitude from the government?

Josh: Well, I’m pleased to say that Cabinet has kept out on lots of issues over a long period of time under the Turnbull government, but in relation to the consultation and the deliberation in consideration of this policy, it’s been in the pipeline for some time and as the prime minister said, nearly a year there was a review conducted by John Azarius that looked into these particular issues. It went through the proper Cabinet processes well and then it was announced and it has been well received by industries.

Thought bubbles

Ross: What I’m asking is if and when thought bubbles are going to stop Josh? They drive people crazy. All of a sudden, there’s a float. We’re going to raise the GST. We’re going to change negative gearing. No, we’re not going to do these. What I keep on saying is that thought bubbles don’t work.

Josh: Well, thought bubbles don’t work. You are right about that and this is a good example of considered policy being well-received by industry and making a welcome change to fix the mess we entered into.

Gas crisis

Ross: Or at least get to the reason why we really need to have a chat and that is the gas inquired from the ACCC. Australians understand that there is something wrong when gas is being exported overseas at prices often much more cheaply than what we can pay for it here in Australia and yet we have shortages of gas in Australia, which means we don’t have incentives to build power stations. We don’t have sufficient gas and industry is ultimately either compromised or lost to overseas where there are ready energy supplies. Is this what you’re trying to address here?

Josh: We’re certainly trying to address the gas crisis, and you are right. As you say, Ross, it’s a critical feed stock for business, for manufacturing as well as being important in electricity generation and the cost of power for households. Now, we export two-thirds of what we produce on the East Coast. A state like New South Wales imports 95% of it’s gas. Victoria, unbelievably, has put a moratorium on conventional gas extraction, that’s not even involving fracking, and a ban on unconventional gas extraction, even though if they just removed 1% of what they have, they could provide the power and the gas power for Victoria for a year.

Ross: Okay, just one thing on this. Can I pick up Santos, the Chief Executive, Kevin Gallagher. Quite clearly, the industry is at sixes and sevens at the moment because he’s now making accusations against Shell and Origin Energy and also the Prime Minister, saying it’s been effectively a fake information, that Santos is not a contributor to our net gas demand because, of course it’s one of the big players in that Queensland, Curtis Island gas plant that is bringing a load at. Now, here’s the point, are we finger-pointing at which gas companies are contributing locally and domestically and which are not? Is that where we are at right now?

Josh: Well, we have had a very constructive discussion today with the LNG suppliers, and obviously Santos was at the table and Kevin was there and we have a good relationship with him.

Ross: It wasn’t grumpy at all, Josh?

Josh: Well, he understands the problem we’re trying to solve. That’s been building for some time and that it’s a result of a confluence effects, of which the growing exports is one factor but also the fact that the oil prices halved has meant that there is less exploration than in previous years.

Ross: But you and I both know, Josh, that the ordinary person sitting out there says, “If gas is being sent overseas in preference to being put into the local market, that it’s not fair and it’s not right to Australians the country from which the gas is coming from.”

Josh: I get it and that’s the problem we’re trying to solve. Now, we’ve already got a commitment from these companies, an important one, which we’re working through with them today, which is to meet any short-falls in the domestic market, which the Australian energy market operator told us would occur from 2018-19, but what we need from these companies is to develop more of their gas and we need to lift some of these moratoriums on the development. Now, we have seen some good stories in the last couple of weeks. You and I have talked Ross, about the fact that ENGIE’s Pelican Point gas-fired power station in South Australia, which was previously mothballed has now got contracts for gas and that’s been in part due to the pressure the Prime Minister has put on the companies, which is a very positive sign. There’s a lot more to be done, but today was a step in the right direction. Now, when it comes to Santos, they are part of the GLNG export group from Gladstone. There’s not just them. There’s also a French company, Total, and two other companies called Petronas and Coregas and it’s well known in the industry that that group actually takes more gas out of the domestic market than they put in and that’s what we are seeking to change.

Ross: I tell you, it’s going to be interesting to watch out. Just as I leave Josh, I’ll just play one grab from Bill Shorten today talking gas. Here’s what he had to say;

Bill Shorten : We don’t want to see the future jobs growth of blue-collar jobs, manufacturing jobs, Australian jobs jeopardized because we’ve got a Federal government led by Mr. Turnbull, which is too weak to stand up to the gas companies. He needs to be very clear. He needs to bang heads and say, “It’s not good enough that Australian companies and workers are being treated as second class to export contracts by large gas companies.”

Ross: Did you bang any heads today, Josh?

Josh: We certainly made progress, and it was a constructive discussion but I got to tell you, Ross, there won’t be a soapbox that Bill Shorten doesn’t love to jump on because he has to answer for the fact that it was in 2010 and ’11 when Labour was in government, that these final investment decisions to export all this gas from Gladstone actually took place and it’s Labour government, locked the one in Victoria, locked the one in the Northern territory, who are locking up decades’ worth of gas under the ground. That’s what he has to talk about rather than blaming the Federal government to simply make a partisan political point.

Ross: Energy and Environment Minister, Josh Frydenberg. We appreciate your time.

Josh: Good to be with you.

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