Interview with Chris Smith, 2GB

  • Transcript
Subjects: AdBlue production; AUKUS submarine deal; EU free trade agreement.
21 December 2021

Chris Smith: Minister, good morning to you.

Dan Tehan: Good morning, Chris. Wonderful to be with you again.

Chris Smith: Yeah, when we last time you said we can't afford to make too much AdBlue locally because it would distort the market. How does this announcement fit in with that theory?

Dan Tehan: So, what we're doing is we will be lifting the manufacturing, so Incitec Pivot will be doing that in a way that we maintain the market status quo. We're also importing an extra 5,000 tonnes of urea from Indonesia, so that's about a month's supply worth.

Chris Smith: Right.

Dan Tehan: So, all this will enable us to be able to make sure that that supply continues. And what it will do also, we've seen some added price pressures come on. This will enable us to deal with those added price pressures as well.

Chris Smith: So Incitec Pivot, they were planning to shut their urea plant in Queensland, and now we're ramping up production at Gibson Island. Has that convinced them to stay in the game?

Dan Tehan: It has. Obviously the government approached Incitec Pivot and said to them, we would like you to consider continuing to manufacture. Obviously if they stopped that would put a dent in domestic supply. So, we've been able to work through with them a way to enable them to keep manufacturing, which should provide us with that consistency of supply that we need, plus we've obviously been out to our international partners to make sure that we can continue to provide supply by importing urea as well. So, we should be able to get back to a situation as to where we were, which was obviously providing enough AdBlue into this country.

And what we're also seeing around fertiliser is there has been some supply chain issues there. So hopefully doing all this we'll also be able to do it in a way that doesn't impact on fertiliser coming into this country.

Chris Smith: So, the timing for all of this – urea from Indonesia, 5,000 tonnes – when will we see that arrive?

Dan Tehan: So that will arrive in January.

Chris Smith: Right.

Dan Tehan: And that's about a month's supply there. And in the meantime, Incitec Pivot will be working obviously to boost its domestic production levels here. And we continue to explore options with regards to Saudi Arabia, the United Arab Emirates, Qatar and Japan to see if we can get additional supply.

Chris Smith: I'm hearing from truckies, though – and even as late as today – that they're having real problems trying to source AdBlue. There's obviously been a panic over supplies which has led to stockpiling. How do we prevent stockpiling?

Dan Tehan: So, what we've also put in place is what's called a national control mechanism which will enable us to be able to deal with some of the supply issues because there are indications that there are some companies which are buying more than they need and warehousing it. So, what we need to be able to do is to make sure – and we're working with the ACCC on this – that normal supplies can continue so we don't see that distortion in the market from some purchasing levels way beyond what they need.

Chris Smith: Right, okay. Just – can I ask you a couple of questions on AUKUS and these submarines. We've been told by the US that we'll receive at least one of the subs at the earliest possible date, which is good news. What's the timing of this? And why have they decided to bring it forward?

Dan Tehan: Well, obviously we're working closely with both the US and the UK on where we would get purchase or source our nuclear-powered submarines. And obviously one of the key things for us is that we need to be able to ensure that there is no gap between when the Collins Class submarines are ready to retire and we're ready to move to nuclear-powered submarines. So, all this is part of the ongoing process of working through with both the US and the UK when we would be able to purchase and get supply of these nuclear-powered submarines. Obviously around the building of them here so we're setting up our own national capability and making sure there isn't a gap. And one of the key things we want is to make sure that we can get access to the nuclear submarines so that we do not have that gap. And we'll continue talking to both the US and the UK. But it's something that they're obviously very keen to work with us on.

Chris Smith: The former PM Tony Abbott, who, of course, is working as a consultant for the UK government, says we should be getting UK submarines. I guess he would say that. But is there any sense in getting a UK submarine over a US submarine?

Dan Tehan: Well, what we want to do is get the best submarine we possibly can at the best price we possibly can with the best servicing we possibly can and, in particular, the best technology transfer that we possibly can. So, this will be a process that we work through with both countries, but obviously for us we'll be keen to pursue our national interests and make sure we get the nuclear-powered sub which is in our interests, so we'll continue to have those discussions with the UK government and the US government.

Chris Smith: And is of your first jobs in the new year to re-engage the EU on a free trade deal?

Dan Tehan: Absolutely and we've had good news in that regard. Negotiators met two weeks ago. Intersessional work is continuing and will continue through January, and we'll have the 12th round in February. And my hope is we'll be on track to be able to finalise the EU free trade agreement before Christmas, just like we did with the UK one last week, which is the best FTA we've done outside the one we've got with New Zealand.

Chris Smith: Okay. I'll leave you alone now. We've been meeting up too often. I want you to go and have a Christmas break. You need it as much as anyone – maybe even as much as the Prime Minister. You've done some good work in 2021, and I thank you for your time and your great efforts.

Dan Tehan: Thank you, Chris. And merry Christmas to you and your listeners, and I look forward to chatting in the new year.

Chris Smith: Good on you. Fantastic. Federal Trade Minister Dan Tehan.


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