Interview with Fran Kelly, ABC Radio National breakfast

Fran Kelly: A parliamentary investigation could be launched into whether it's legal for banks and insurers to blacklist companies that are linked to coal and gas producers. The Federal Resources Minister, Keith Pitt, has requested the inquiry saying legitimate and law-abiding businesses are being unfairly targeted for being involved in the fossil fuel sector. This comes amid claims that Australia is now globally isolated on climate action after the Prime Minister was denied a speaking slot at the weekend UN Summit on Climate Ambition - denied that spot over our Government's refusal to commit to a net zero emissions target by 2050. Keith Pitt, joins us again. Minister, welcome back to Breakfast.

KEITH PITT: Good morning, Fran, good morning to your listeners.



FRAN KELLY: You've asked for this parliamentary inquiry. You say the lending to and insuring of resource based companies is a matter of national significance. Why is it?



KEITH PITT: Well firstly, because in the last financial year the resources sector added some $293 billion to Australia's GDP, that employs directly nearly 250,000 Australians - it's a very important part of what we do. And Fran, you know, there's been very few advantages in the COVID-19 period, but one, for me, was the restriction in travel, which meant I spent a lot more time doing round tables in places like Townsville, and Mackay, and Rockhampton, and Gladstone and eventually, down into the Hunter and Newcastle. And what came through very, very clearly, mum and dad businesses, all the way through to ... very, very big companies are having trouble getting, firstly, insurance if they work in the resources sector; and, secondly, finance. Now, I don't think that that should continue. I referred committee of Inquiry to the Trade and Investment Committee. Now, the Committee will consider that this week, as my understanding, it's up to them whether they move forward on it or not, or come back and ask for a change in terms - but, that is up to the Committee. Parliamentary inquiries are very powerful, and I would expect them to do a significant amount of work to determine how big the challenge is, and what we might be able to do about it.



FRAN KELLY: Okay. But, the big question is why they've been finding it harder to get insurance or finance? There could be a lot of answers to that. But, what's your end goal here? Do you want to force companies to underwrite businesses, you know, if linked to fossil fuels? Even if they are viewed as bad investments and could cause either economic- financial or reputational damage to the investor or the insurer? Is that, is that what you want to happen?



KEITH PITT: [Talks over] Well firstly, well firstly, I'm not going to pre-empt what the inquiry might find as an outcome or as a recommendation. But secondly, Fran -



FRAN KELLY: [Talks over] Well, you clearly want some action. I mean, you're worried about it. What would you want to happen? To change?



KEITH PITT: Well, I'll give you some easy examples. If you're an engineer; whether that's a civil or electrical or mechanical, and you can't get professional indemnity insurance because you might work in a coal mine for part of your work. I mean, what difference does it make if you design a tail order dam to improve coal mine or one for agriculture? They're exactly the same. Now, and-



FRAN KELLY: [Interrupts] And you've heard about these engineers not being able to get personal indemnity for that reason?



KEITH PITT: Well, professional indemnity has been very challenging. Public liability has been challenging. I mean, this is the feedback that I've got through these round tables, I've heard them through [indistinct]…



FRAN KELLY: [Interrupts] Because of connection to the resource industry? Not because of, I mean, public liability, there's a lot of concerns, obviously, about natural disasters?



KEITH PITT: Well, that's what's been put to me, Fran, and that's the reason that I'm asking the committee to do the inquiry. I mean, look at your own situation. If you couldn't get a loan for a vehicle because you worked at the ABC, do you think that would be right? Well, in my view, it's not. This is why we are asking the committee to go and make inquiries to determine what the facts are, and then make recommendations.

FRAN KELLY: Okay. But, let's take ANZ; it updated its climate change policy a few months ago - many of the Nats were unhappy about that, yourself included. The bank will no longer fund new coal mines or coal fired power stations and will phase out existing coal investments by 2030. But, isn't the bank doing what the regulator, APRA, has told it to do, which is that the climate risks into its lending decisions? It is getting out of coal because it sees no future in coal. Isn't that sound prudential practise?



KEITH PITT: Well, Fran, once again I mean, what about the thousands of people who work in the resources sector who have mortgages, they have car loans. Even ports - now, the ports is a majority export-



FRAN KELLY: [Talks over] I understand. But, you've got the advice from the regulator. What should the financial institutions do? Ignore that?



KEITH PITT: Well, as you would have seen on the weekend there's also advice from small business that it's a challenge for them as well - it's creating all sorts of angst in terms of insurance. But once again, why would you rub out something like a port, which is a majority exporter for steel making coal, simply because it's coal? So once again, I put an inquiry across for the Committee to consider; the Committee will make a decision on whether they proceed; and, I expect they'll do what all Committees do - they'll work hard, they'll establish the facts, and, they'll make recommendations.

FRAN KELLY: You mentioned the Small Business Ombudsman's report last week, a widespread market failure when it came to availability and affordability of insurance - that is true. Some small businesses can't find cover because they're involved in mining - that was the feedback. But, the bigger problem, according to the Ombudsman, is the prevalence of natural disasters. Do you accept that?

KEITH PITT: Well Fran, once again, insurers are out making decisions. We have any number of Australians who do live in regional and remote Australia - they are entitled to be insured at a reasonable rate, as other Australians are. So, we want to ensure that that happens. This has been a long running problem as I'm sure you know, Fran.



FRAN KELLY: Yeah. But I understand that, they might be entitled to be insured but businesses- insurers are entitled not to insure businesses and individuals that are in areas where increasing natural disasters are causing more claims. Is the answer some kind of government underwriting insurance? Is that the issue? Is that the solution, do you think?



KEITH PITT: Well once again, I mean, this is in Michael Sukkar's area. There's been any number of inquiries, there's been a lot of work underway. I know Minister Sukkar's working very hard on the issue, but it's a challenging one. You've only got to listen to Warren Entsch in the Far North - aged care facilities for example, massive increases in their insurance. We need to ensure that all Australians have an opportunity, that is what we should do as a, as a Com- as a Commonwealth, as a Federal Government. It's certainly my intention to make sure that everyone gets that opportunity to be insured at a reasonable rate, I mean, it's a bigger(*) issue.



FRAN KELLY: [Talks over] Yes. But you also got to ensure that it's a, that it's a fair game for the insurers too. I mean, just looking at coal again, the Super industry doesn't see a future in coal either. Australian Super controls a $200 billion portfolio in investments, like many businesses, including Santos, for instance. It's committed to hitting net zero by 2050, and the Chief Executive of Australian Super, Ian Silk, says, quote: the outlook for coal stocks is incredibly bleak. I mean, isn't the market the ultimate arbiter of whether coal has a future?



KEITH PITT: Well there's over 200 power stations either under construction, or in detailed design, or planning right around the world that will use thermal coal to generate. Once again, we come back to technology. It shouldn't be about what the feedstock is, it's about what your emissions level are. So if you can control your emissions through technology and you wish to use Australian resources, well, I think that's fine and I think we should continue to do what we do best.



FRAN KELLY: Okay. So you'll- you're, you know, lumping the hope and future certainty on technology, technological breakthroughs?



KEITH PITT: Well there's been any number of technological breakthroughs already. There's been significant advances. As we've said on this programme before, Fran, high efficiency, low emission coal fired power stations have massive reductions [indistinct]…



FRAN KELLY: [Interrupts] You have said that, and yet still, to quote Ian Silk: the outlook for coal stocks is incredibly bleak.



KEITH PITT: Well, once again, the-

FRAN KELLY: [Interrupts] The markets leading this, isn't it?



KEITH PITT: The International Energy Agency still says there'll be very large demand for coal. Australia's coal is a very high quality product - it will continue to be that way. We're very efficient in terms of how we deliver it, which means we're cost competitive. And not all coals are equal, Fran. Lot of these things are tuned into their particular boilers and particular users, so I think the market demand will continue. Coal prices are actually up in recent days and weeks. And once again, we've got a lot of hardworking Australians out there who're working in the industry, and I think they've done a great job over the last few months.



FRAN KELLY: That kind of talk is in stark contrast with, for instance, the warning we got from the UN Secretary-General, Antonio Guterres, over the weekend who says: we're heading for a catastrophic temperature rise of more than three degrees by the end of the century unless all countries declare climate emergencies.



KEITH PITT: Well look, as the PM-



FRAN KELLY: You've said that.



KEITH PITT: Well, as the Prime Minister has said, we are the ones who set Government policy in Australia. We took our policies to the last election, that was accepted by the Australian people and we're about delivery. I mean, Green statements are quite simple to make, and if they made a difference, well, Mark Butler and Pat Conroy made that exact statement in the Parliament many months ago and I don't seem to recall it changing anything. So it's about outcomes, it's about a plan, it's about knowing where we're going and what it will cost, and it's about delivery.



FRAN KELLY: It is also about reputations, isn't it? I mean, there is reputational damage potentially. Australia was snubbed at the virtual UN Climate Ambition Summit. I know the Coalition is not worried about that, but there are warnings of plenty of retaliatory action on the trade front if we don't lift our climate action and ambitions.



KEITH PITT: Fran, well we-



FRAN KELLY: [Interrupts] Are you taking those threats seriously?



KEITH PITT: Well, we support a rules based system, and that is exactly what happens with trade. Australia continues to deliver, under the agreements we have right around the world - whether they're FTAs, or RCEPs, or otherwise. And once again, we set the policies for this country. The Australian people are the ones who determine who's in Government and that's the [indistinct]…



FRAN KELLY: [Interrupts] Yeah, but are you not worried about some of our trading partners building in some kind of retaliatory measures into trade agreements linked to emissions? Because the US President-Elect, Joe Biden, is certainly signalling that.



KEITH PITT: Well, my concern is about jobs. It's about how many people I can't have employed in Australia.



FRAN KELLY: [Talks over] That would be about jobs though, wouldn't it?



KEITH PITT: We want to ensure as many individuals as possible are employed as quickly as we can get them back into the work, into the workforce, and the resources sector is a massive part of that. So we'll continue to work with technology, we'll continue to work with our traditional industries - whether you're in Newcastle or Townsville. I want to ensure all of those individuals who've done an incredibly good job over the COVID period continue to be employed.



FRAN KELLY: The Prime Minister seems to be pivoting a little on climate action following Joe Biden's election as US President. Scott Morrison said he'd like to see Australia achieve net zero emissions as early as possible. But in the past the Nationals leader, Michael McCormack, has called that target unworkable; Matt Canavan said it was fantastical. Will the Nats ever let Scott Morrison make a firm commitment for Australia to have net zero emissions by 2050?



KEITH PITT: Fran, the Nationals stand up for regional Australia. And as I've said, it's about jobs [indistinct]...



FRAN KELLY: [Interrupts] Well, does that mean they will or not? Do you support net zero emissions by 2050?



KEITH PITT: Well there's been, there's been no policy decision on that. We've made a commitment to 2030 which we are delivering on - and this is about delivery. As I said earlier, it's easy to make grand statements but there's a lot of difference between actually delivering on those statements or not.



FRAN KELLY: Do you have a view yourself on net zero emissions by 2050 years as a goal?



KEITH PITT: Well once again, I mean, in 30 years I'm hopeful I'm still breathing, Fran. But we, we'll maintain our focus on the commitments we've made that the Australian people have agreed to. And in regional Australia in particular, we want to make sure that those big industries that continue to drive employment for us are sustainable into the long term, and that's what we intend to do.



FRAN KELLY: Just finally, Minister, your predecessor in this job - Resources Minister, Matt Canavan - has now called for a levy to be slapped on Australian iron ore exports to China, basically as punishment for the trade strikes from China against our wine, our seafood, our barley, our beef. The penalties should be raised every time, he says, Beijing takes further action against other exports. Do you support that idea?



KEITH PITT: Oh look, backbenchers are entitled to their view, Fran. We worked under a rules-based-



FRAN KELLY: [Interrupts] What do you think of it?



KEITH PITT: Well, we work under the rules based trading system and Australia will meet its commitments.



FRAN KELLY: Keith Pitt, thank you very much for joining us.



KEITH PITT: Great to be with you.



FRAN KELLY: Keith Pitt is the Minister for Resources, Water and Northern Australia.