UNCORRECTED PROOF ISSUE Wednesday 5 June 2019 - Estimates Committee A (Barnett) LEGISLATIVE COUNCIL ESTIMATES COMMITTEE A Wednesday 5 June 2019 MEMBERS Mr Finch Ms Forrest (Chair) Mr Gaffney Ms Lovell Mr Valentine Ms Webb IN ATTENDANCE Hon Guy Barnett MP, Minister for Primary Industries and Water; Minister for Energy; Minister for Veterans' Affairs Ministerial Office Ashley Bastock, Chief of Staff Laura Richardson, Senior Adviser Stewart Pedersen, Senior Adviser Matthew Hochman, Senior Adviser Vanessa Pinto, Senior Adviser Adrian Lacey, Senior Adviser Department of Primary Industries, Parks, Water and Environment Dr John Whittington, Secretary Ms Deidre Wilson, Deputy Secretary Ms Carole Rodger, Acting Deputy Secretary Mr Adrian Pearce, Manager, Finance Mr Stuart Fletcher, General Manager, Land Tasmania Mr Tim Grant, Valuer General, Land Tasmania, Office of the Valuer-General Dr Lloyd Klumpp, General Manager, Biosecurity Tasmania Ms Fionna Bourne, General Manager, Water and Marine Resources Mr Jason Jacobi, Deputy Secretary, Parks and Wildlife Service Danielle Poirier, Director Agrigrowth Estimates A 1 Wednesday 5 June 2019 - Barnett UNCORRECTED PROOF ISSUE Department of State Growth (Energy) Kim Evans, Secretary Gary Swain, Deputy Secretary, Transport Services Sue Morrison, Acting Executive Director, Energy Andrew Rayner, Acting Director, Energy Market Development Department of Communities Tasmania (Veterans' Affairs) Kate Kent, Deputy Secretary, Communities, Sport and Recreation Nick Atkins, Acting Manager Policy and Programs Scott French, Principal Business Analyst Gina Webster, Secretary Inland Fisheries Service Mr John Diggle, Director Inland Fisheries Service The Committee met at 9 a.m. CHAIR - Good morning, everyone. I need to correct the record in relation to a previous output group on Monday under the Treasurer's portfolio area with regard to output group 1 - Industry, Skills Development and Business Growth under Coordinator-General, and Industry and Business Development. The deputy secretary of the department requested a change because some numbers were incorrectly read and it was the secretary's, Mr Evans', evidence. I will read out the changes and if he wishes to say something after that, he is welcome to before we proceed with today's proceedings. To read it in context, we were talking about consultancies - CHAIR - We didn't ask about consultancy cost, we talked about travel cost. Do you have consultancy costs, and what areas of consultancy were they? Mr EVANS -Yes, I have some extensive information on consultancy costs and contractors, over $50 000 for the year 2018-19, for the year 1 July 2018 to 3 June. These only go to the end of April. We awarded 45 significant contracts and consultancies over $50 000 and advertised 43 tender quotes during the period 1 July to 3 June. The value of these contracts awarded was $129 309 000.177. Mr GUTWEIN - This also captures all the consultancies across State Growth that will be included in Infrastructure. Mr EVANS - The majority of these contracts and consultancies relate to our infrastructure projects. If we can break those down, in Infrastructure, there were Estimates A 2 Wednesday 5 June 2019 - Barnett UNCORRECTED PROOF ISSUE 31 in the State Growth portfolio itself; the one we're examining, Science and Technology, 2; Arts, 5; and the Coordinator-General's office, 5. In the State Growth area outside the Coordinator-General's office, the consultancies were: $642 368, and the five contracts awarded through the Coordinator-General's office amounted to $771 300. End of corrections. CHAIR - Then the transcript continues as uncorrected. I wanted to correct those figures, for the record. I don't know whether the secretary wanted to add anything, minister, before you start? Mr BARNETT - Thank you, Chair, I'll check if Dr Kim Evans would like to add anything. Mr EVANS - I'm not a doctor, I would like to be. Thank you for correcting the record. It was an inadvertent omission that we dropped a couple of Coordinator-General contracts that we subsequently discovered, so we wanted to quickly correct the record. CHAIR - For your information, the committee will write to you with a few other subsequent questions as a result of the information we have received. Welcome, minister, to your portfolio areas and I invite you to introduce the people at your table. DIVISION 11 (Department of State Growth) Output group 3 Energy policy and advice Mr BARNETT - Thank you very much, Chair. It is good to be back again; at the table are Kim Evans, Secretary of the Department of State Growth (Energy); Gary Swain, Deputy Secretary, Transport Services; and Sue Morrison, Acting Executive Director, Energy. There may be others from time to time during the day, but perhaps I can introduce them at the time more formally. CHAIR - Minister, I invite you to make some opening comments if you wish to. Not too long, I assume you've got the drill by now. Mr BARNETT - Yes, I've got the drill, thank you. I always welcome the opportunity for some opening comments because Tasmania a very exciting place to be at the moment in respect of energy. We have an abundance of renewal energy; it's one of our greatest advantages and we are embracing those opportunities to build on our existing assets and to play a key role in the nation's energy future. Tasmania has what the rest of the nation needs and as the national market transitions, we are positioning Tasmania to take best advantage of those opportunities and encourage further investment in our state. Estimates A 3 Wednesday 5 June 2019 - Barnett UNCORRECTED PROOF ISSUE We are very focused on keeping the cost of electricity down for Tasmanian households and small business. We are positioning Tasmania for the future - the electricity market has begun a period of dramatic change as the National Electricity Market transforms from one dominated by coal-fired generation to a more diverse combination of generation. Renewable sources include hydro and wind, and they have the potential to play a much more significant role. With our natural advantages in this area - world-class wind and world-class water resources - Tasmania is well-positioned to play an important role across the country. Together with the Australian Government, we are investing up to $86 million to progress the Battery of the Nation and the Marinus Link. These projects are the next generation of Tasmania's renewable energy infrastructure and we are pursuing them on a beneficiary pays basis to deliver for Tasmania, so Tasmania only pays its fair share. These nationally significant developments have the potential not only to inject billions into the Tasmanian economy, but also to deliver thousands of jobs, many of these in regional areas. Alongside new wind farms, including those currently under construction at Cattle Hill and Granville Harbour, Battery of the Nation and Marinus will enable Tasmania to play a bigger role in an orderly transition to a lower carbon emission National Electricity Market while protecting our energy security. To ensure we can make the most of these opportunities, we must have the right policy settings in place within Tasmania and at a national level. In our jurisdiction we are already working towards the Tasmania-First Energy Policy, which you are aware of, with initial work focused on the Battery of the Nation and the Marinus Link. Together with my counterparts in the COAG Energy Council, we are working towards creating a national framework capable of supporting strategic opportunities like the Marinus Link and Battery of the Nation. One exciting example of longer term opportunities and emerging opportunities is hydrogen. Hydrogen has the potential to be a renewable cost-competitive energy source and may present a long-term opportunity for Tasmania. The Tasmanian Government is actively involved in emerging interest in hydrogen, including a policy agenda via COAG. In terms of having the fundamentals right, we are planning for intergenerational energy investments. We are also focused on managing these fundamental energy assets to deliver reliable, affordable energy for Tasmanians. During the year, we progressed important changes to modernise our legislative framework and ensure it reflects a contemporary environment. The Energy Security Risk Response Framework recommended by the Energy Security Taskforce has been written into legislation through the Energy Co-ordination and Planning Amendment Act 2019. This includes formalising the roles of the independent monitor and assessor roles who have oversight of Tasmania's energy security needs. Enshrining those important roles in legislation ensures their functions and powers are guaranteed. We have also progressed important updates to gas. Gas industry legislation to streamline the administration of the gas supply industry through the Gas Industry Act 2019. While ensuring Tasmania's legislation remains modern, responsive to contemporary environment, we continue to focus on keeping, energy prices as low as possible for Tasmanian households and businesses. We have capped annual regulated power price increases to no more than the CPI for four years since 2017-18; provided $5.5 million in energy rebates to commercial and industrial Estimates A 4 Wednesday 5 June 2019 - Barnett UNCORRECTED PROOF ISSUE businesses and continued our generous $45 million concessions, supporting more than 90 000 Tasmanians. We have provided assistance to low-income Tasmanians to reduce their energy usage by investing an additional $1 million over four years in the Tasmanian Energy Saver Loan and Subsidy scheme. We are committed to supporting our farmers with the On-Farm Energy Audit and Capital Grant Program, which has provided subsidies to farmers to engage a qualified professional to review farm energy use and to purchase new energy efficient capital infrastructure. The Budget's 2019-20 $5.5 million Tasmanian Irrigation Renewable Energy Project will focus on reducing irrigation costs through micro hydro-electric systems that can be passed onto our irrigators. I spoke about this yesterday in the Northern Midlands.