Second reading- Mineral Resources (Sustainable Development) Amendment (Latrobe Valley Mine Rehabilitation Commissioner) Bill 2017
25th May 2017- Mr O'Sullivan- I wish to rise today to speak on the Mineral Resources (Sustainable Development) Amendment (Latrobe Valley Mine Rehabilitation Commissioner) Bill 2017. I wish to take up a few points that have been raised in this chamber by speakers before me and I will expand on some other areas as well. The aim of the bill is to establish the office of the Latrobe Valley mine rehabilitation commissioner. I think that is somewhat of a reasonable proposition, although I do have some other issues that I will raise in relation to that. We are starting to see a bit of a pattern of behaviour here, where every time this government has a crisis, it has to form another committee and appoint another commissioner to try and mop up the mess. The commissioner will be responsible for investigating, monitoring and reporting to the Minister for Industry and Employment and the Victorian community on the activities and strategies being implemented to rehabilitate the coalmine in the Latrobe Valley region.
We all know the background to this situation, where there was a bushfire in the Latrobe Valley. One of the really disappointing things about that fire was that it was started by somebody down there through an act of arson. That is really disappointing because we all know the devastation that fires can have, whether it be out in the bush or whether it be in a house. In this case it was around the hinterland of the mine. In the warm conditions the fire burnt into the mine. Obviously with all that coal sitting there, there was a lot of fuel that should have been burnt for the proper reasons, not just burnt through an act of arson. Those are the circumstance behind that mine fire starting in the first instance, and it then burned for quite a few days.
As we all know, it is difficult to extinguish such a fire because obviously not only does it burn on the surface but it can burn underneath as well. I am sure we all remember seeing on the TV or in the newspapers images of the flames burning right around the edges of the mine. There is no doubt about it — a whole range of issues resulted from that, with the smoke and other pollutants that escaped. Because that was going on for such a long period — I think someone said earlier it was 45 days — —
Mr Barber interjected.
Mr O'Sullivan— Mr Barber, you had 45 minutes and you sat down with 24 minutes to go. I think if you were going to say some more about this issue, you could have remained on your feet and finished off what you were going to say.
That is the background behind the situation, which has brought about a whole range of recovery efforts that have had to be put in place both at the time of the actual fires occurring and subsequent to that. Now a commissioner will be put into place to deal with those issues, and other people have eloquently discussed all the scenarios that will play out as a result of that. One issue that I want to talk about is the coal in Gippsland and some of the other scenarios around that particular mine. As we know now, the Hazelwood brown coal mine has been shut down by this government. Members can understand why it was shut down. This government, in the budget before this one, instigated a $252 million tax on the industry. That is what obviously put a huge amount of pressure onto that company operating Hazelwood. That company decided that under the burden of such a large tax being applied to them, they no longer wanted to continue to operate that facility.
We also must remember that back in 2010 the Labor government went to the election with a policy to close Hazelwood, so it is not surprising that we got to a situation where Hazelwood did close. Having said that, there is no doubt that Hazelwood was old technology, had been around for some 50-odd years or more using old technology and was a fairly significant polluter. There is no doubt that over time Hazelwood was going to close, but that additional tax, $252 million, on the industry plus the policy from government was a significant contribution to that closing.
Mr Barber interjected.
Mr O'Sullivan— Mr Barber, you seem to be sticking up for government policy on this.
Mr Barber — I voted for it. I voted for the tax.
Mr O'Sullivan — I thought you were separate to the government on this situation, but some say that the Greens are in bed with the Labor Party. I am not one who necessarily believes that, but you are the one sticking up for Labor policy on this one.
What has happened as a result of the Hazelwood mine closing? We have seen a number of things, and obviously the baseload power that is required in this state is fairly significant in terms of undertaking a whole range of things within the community, whether it is just keeping the lights on and operating the microphones as it does right here in this chamber or whether it is out in the households where people are feeding their families and refrigerating their food. They are trying to keep warm as we move into winter, so they turn the heaters on and they are watching TV and doing a whole range of other activities. That is what families are certainly using electricity for, and if you look at some of the other industries out there, whether it be food processing industries or a whole range of manufacturing-type industries, they are high users of electricity to undertake the operations that they do which employ people and create wealth for this state and for this nation.
It seems that power prices have gone up significantly as a result of the Hazelwood mine closing, and while there is a whole range of factors that have helped or have not helped or have actually brought about the increase in those prices, there is no doubt that the actual closure of Hazelwood in terms of having less base load power on demand has been a contributing factor. If you look at some of the industries around, and I will mention a few of them up in Northern Victoria, which is my electorate, you have got a group such as Kagome, a large food manufacturing and processing plant in Echuca. Their energy bills have gone up significantly. Their energy bills have gone up $1.5 million a year. A lot of their energy use is through gas, but their electricity prices have gone up significantly as well. Looking at other processors up there, a large dairy farm at Kyabram, KyValley — three generations of dairy farmers in that particular family organisation — their electricity bill has gone up 50 per cent in this year alone.
Mr Barber — What has their gas bill done?
Mr O'Sullivan— I do not know what their gas bill has done, but their energy prices for electricity have gone up by 50 per cent in one year, and this is a business that employs 100 people in the Kyabram area. Those sorts of increases in energy costs are putting a lot of pressure on those types of businesses that employ people in the community and create wealth for this country. So there is no doubt that those actions that have been taken by this government have brought about a situation where people are paying a lot more for their electricity prices. It is all very well for the businesses — although that is terrible; there is no doubt about it — but what I really find annoying and frustrating is when you hear stories of the elderly, the pensioners and so forth, who cannot afford to turn their heaters on at night-time because they cannot afford the higher electricity bill. So what they do is they get two or three blankets out and they wrap themselves up in blankets to try and keep warm, or they go to bed early. On days when it is particularly hot or cold they go to a shopping centre to see if they can get some respite in those particular areas because they cannot afford to pay the electricity if they were to heat or cool their own homes. Particularly in summer we understand that the extreme heat, with some of the elderly not being able to seek respite from particularly hot weather, causes a lot of fatalities. So that is one of the other contributors that has certainly played its way through in relation to this.
The closing of Hazelwood itself involved 700-odd direct jobs and thousands of indirect jobs. We have seen that the Latrobe Valley, the Gippsland area, has been particularly hard hit under this government, with a wave of attacks in terms of the job-destroying policies that they have put in place, whether it is Hazelwood itself or Heyfield in terms of the uncertainty of the 260 jobs there in the timber industry. We have just seen other timber businesses down there close. Carter Holt Harvey have also said that they are struggling at the moment. I understand that is not necessarily directly as a result of the government, but still under the circumstances that are in place they can no longer get the timber that they require and look like they will have to close.
In terms of what Hazelwood has been able to provide in terms of base power, that base power now is certainly not as strong for this state as it once was, and therefore we have to rely on other sources of energy to bring about the power base that we need. In many instances we actually have to get power from other states. Where once upon a time Victoria was a significant exporter of electricity to other states, now — certainly we do at times export to other states — there are opportunities where we are the receiver of power from other states. Once upon a time Victoria was very proud of its power industry. We were the backbone in terms of power generation in the whole country. That is very fast not delivering the actual impact that we would expect in this scenario that we are very much used to.
Just going back to the role of the commissioner, we have seen this government appoint other commissioners around Gippsland. For example, the Latrobe Valley Authority has just recently appointed their commissioner, Karen Cain, whose job comes with a very generous salary of some $200 000 to $324 000. When we looked a bit more closely as to the background of Karen Cain in terms of undertaking that position we found out that she was the president of the Labor Party branch of South Gippsland, so I am certainly hoping that when it comes to the commissioner for the Latrobe Valley mine rehabilitation there will be some more stringent background checks done, and hopefully there will not be any political payback or political rewards given out in terms of appointing a government mate to such a high-paying job, as they did with the Latrobe Valley Authority.
Time will tell with that, but what we have seen with this government is that they have got a propensity to reward their mates, as we have seen particularly with the Country Fire Authority (CFA) issue and what this government is doing to the CFA to pay back the debt that they owed to Peter Marshall. But that is getting onto another subject, and I am sure that we will have plenty of time to debate that one when it comes up in ensuing weeks. In terms of this bill, as has been said earlier, we will not be opposing this piece of legislation.