Interview on ABC 891, Breakfast with Ali Clarke and David Bevan

  • Transcript, E&OE
Topics: Woomera Prohibited Area coexistence arrangements, GFG Alliance industry support, private health insurance reform.
21 August 2019

David Bevan: In our studio, here in Adelaide, Rex Patrick, Centre Alliance Senator for South Australia… good morning to you…

Rex Patrick: Good morning.

David Bevan: …on the phone line, Senator Simon Birmingham, Liberal Minister for Trade, Tourism and Investment… good morning to you…

Simon Birmingham: Good morning.

David Bevan: …and Labor's Steve Georganas, the Labor Member for Adelaide. Good morning, Steve Georganas.

Steve Georganas: Good morning.

David Bevan: Rex Patrick, let's start with you. There is a report, in The Sydney Morning Herald, that Australia may bar a China-backed firm from a mine it owns… the company owns this mine… from proceedings with its work, because it's inside the Woomera Prohibited Area. What do we know about this?

Rex Patrick: Well, we do know that CU-River Mining is backed financially by a company called JiuJiang Mining Australia, which is a Chinese state-owned company, and they are intending to mine inside the Woomera Prohibited Area, which is obviously a secret testing ground for the Australian Defence Force and indeed for our allies.

David Bevan: And is that a good idea?

Rex Patrick: Well, clearly, it's not a good idea and I have been asking questions about this in the Senate, I've also been looking at this through the FOI process and, indeed, this week, I received an FOI that shows that the intelligence services have looked at this, Defence has looked at this, the Defence minister, it's gone all the way to Cabinet – there's a real problem here and the problem is that rightly procured the mine, the Foreign Investment Review Board allowed that procurement to occur and now, if we were to stop them, because they lawfully obtained it, we're probably going to have to pay for the mine on just terms, as is required by our Constitution.

Ali Clarke: Any estimates on how much?

Rex Patrick: Well, it could be up to $800 million but, of course, we'd want to have a look at all the risks associated with the deposits – that would be a question that would need to be looked at very, very carefully.

David Bevan: Simon Birmingham, Minister for Trade, what do you take on this?

Simon Birmingham: Good morning, David. I think we shouldn't jump to the type of conclusions that Rex appears to be jumping to. The Woomera protected area is a massive area, it's 123,000 square kilometres, around 12½ per cent of South Australia or indeed bigger than the countries of Austria or Ireland, for example. It has well-established coexistence policies and frameworks in place which were most recently reviewed just in 2018 and details of that review were released in March of this year and those coexistence policies are there because the Woomera protected area is a mix of Crown land, pastoral leases and mining tenements, because, of course, as South Australians, we do all want to see that, so far as possible, that Defence asset is available for Defence utilisation but also that 12½ per cent of our state is not entirely excluded from other development and job creation opportunities. Now…

David Bevan: Okay but can you just confirm there is an issue, here, that this company is effectively owned by China, by the Chinese Government, through various connections but it's effectively run from China – that's correct, yes?

Simon Birmingham: Well, the ownership structures and the different investors involved are matters of public record. CU-River Mining has a permit to operate in the Woomera protected area, in terms of the asset that it has, until 2024 and there's been no application received for any extension of that permit at present. Ultimately, if a permit holder doesn't comply with the terms of their permit, then the Government can of course revoke that permit but I'm not aware that we are at that point.

David Bevan: Okay but the only reason we're discussing this is that it's backed by the Chinese?

Simon Birmingham: Well, we're discussing it because Rex seems to have made…

David Bevan: If this was an Australian company, if this was an American company or a UK company, we wouldn't be having this conversation – is that right?

Rex Patrick: Well, the…

Simon Birmingham: Well, no. Any operator within the Woomera protected area needs to comply with the terms of permits that are there. Why it is that Rex has sought to make this particular one a news story at this particular point in time is a matter for Rex. From the Government's perspective, there's a permit there to operate until 2024 and of course all permit conditions for any of the different operators, be they pastoral lease holders or mining tenement holders, in the Woomera protected area, any of those permit conditions must be met, regardless of who they are.

Ali Clarke: So, what, don't tell anybody about the weapons that you're seeing being tested a couple of Ks away?

Simon Birmingham: It's a little more sophisticated than that.

Ali Clarke: Well, I know but…

Rex Patrick: Look, the Government review that Simon talked about…

Simon Birmingham: And, let's also remember, 123,000 square kilometres.

Rex Patrick: The Government review that Simon talked about made a finding that they did not want to have foreign-owned entities operating inside the Woomera Prohibited Area and the Government has accepted that recommendation, there is a problem and the reason I raise it is because I don't want to give the people of Coober Pedy or the people of Port Augusta false hope. I absolutely support mining in this state but you can't give people false hope. Simon, I have seen the FOIs, I know this is a major problem for Government, it's a problem of the Government's making, we just need to be open and honest about it.

Ali Clarke: Simon Birmingham, if your response to this is 'well, it's 123,000 kilometres square, or 12½ per cent of our state,' then should we moving to have the Woomera area shrunk so these issues won't happen?

Simon Birmingham: Well, no, because what we have is different zones within the Woomera protected area, so there are different access management zones that allow for certain activities in some zones that are then prohibited in other zones, so that provides a gradient, but the idea that, from the outer reaches, you can just see the weapons and don't tell anybody about the weapons you can see… well, that's quite ridiculous when you're talking about the vast scale of land mass that is involved there but, of course, this is an incredibly unique Defence asset, it is the largest land-based test range in the Western world and so we want to make sure that we protect it – that's why reviewed all of the management structures around it – but, as South Australians, we also want to make sure that those coexistence policies work, there's an advisory board, that's chaired by Amanda Vanstone, that has the Chief Executive Officer of the South Australian mines and energy department there, to help inform and work with Defence to make sure we've got all the right protocols in place. In terms of the 'false hope' equation that Rex speaks of, well, in the end, CU-River has not made application for any extension beyond their current permit that applies until 2024 and, if they do, then of course it will be assessed against the terms that we have in place and a decision will be made from there and nobody should assume the results of such assessment one way or the other.

David Bevan: And, Rex Patrick, there are some well-known people involved in all of this. Nick Bolkus, well-known lobbyist, former Labor Senator… he's in the employ of which party in all of this?

Rex Patrick: He's in the employment of JiuJiang Mining Australia, which is the company that is backing this, and he has just recently made a declaration on the Foreign Influence register which confirms that the company has tie-backs to the Chinese state.

David Bevan: Okay. Now, Steve Georganas is listening to all of this. This is all a long way from the seat of Adelaide, Steve Georganas, that you represent, but I wonder what you make of this?

Steve Georganas: Well, there's obvious issues around the risks that are involved and I suppose it's up to the Government to explain how we would work through these issues. Now, you know, we need a mature, calm conversation when it comes to dealing with China but, you know, if Defence and our intelligence services et cetera have raised… you know, have raised legitimate concerns, then they need to be seriously looked at and it's obviously that someone's woken up after 2014 when the permits were issued and realised that this is in a highly sensitive area, so I suppose due diligence needs to be made prior to getting to this point but it is of concern, it's a real concern and, you know, the Government has to explain to us how they're going to work through this and, also, if they don't permit this particular company access to its own mine iron ore mine, well, then it obviously means that there'll be millions of dollars of payouts, as well, so the Government has to work through this and they have to explain how they're going to work through it and, of course, you know, Defence, if they've raised legitimate concerns which we're not privy to, then they need to be seriously looked at, as well.

David Bevan: Simon Birmingham, Minister for Trade, Liberal South Australian Senator, has Sanjeev Gupta, the man attributed with saving Whyalla… has he approached the Federal Government asking for money?

Simon Birmingham: David, look, I met with the GFG Alliance very, very recently and there was no request made to me at that time for direct financial assistance. The, of course, Alliance bought a number of assets when it purchased the Whyalla Steelworks, not just the Whyalla assets, and many of those assets are highly profitable assets elsewhere around the country and it was an integrated purchase and I think taxpayers would fully expect that the very big promises that have been made about the redevelopment of Whyalla, since the Alliance bought it, ought to be delivered on and that the Alliance ought to be using those profitable assets that they bought, as a job lot alongside Whyalla, to help fund the investment there in Whyalla.

David Bevan: Well, there's a report, in The Sydney Morning Herald, that Mr Gupta's GFG Alliance made an informal approach to a joint Commonwealth-South Australian taskforce about the possibility of a public debt guarantee – is that your understanding?

Simon Birmingham: I can only say that it is a matter of days, almost, since I last had discussions with them and they've not put that proposal to me, that I'm very interested in making sure that the big promises that have been made to Whyalla, by the GFG Alliance, are delivered upon, that they actually do ensure that we have the type of strong, prosperous future for employees in Whyalla and the development there but, you know, we do need to understand this is a big global business that has bought in, it continues to buy significant assets, right around the rest of the world, in terms of steelmaking businesses, so it's clearly a cashed-up business. When it bought Whyalla, it wasn't just the ailing Whyalla Steelworks that it bought; it bought a number of other profitable businesses. There's been talks that they may spin off those businesses into a public float that could generate around $1 billion in investment into the company and so, first and foremost, we want to make sure that the colour of the money for the company that has the assets is put into delivering on those Whyalla proposals. Now, if there is a need for government involvement somewhere along the line or a proposal for it, of course we'll have a look at it but it's got to be accompanied by a demonstration that the company itself is making the investments that ought to be made.

Ali Clarke: It's 14 minutes to nine. That's the voice of Simon Birmingham, Minister for Trade. Steve Georganas, Labor Member for Adelaide, is with us, as is Rex Patrick, Centre Alliance Senator for South Australia, here on ABC Radio Adelaide.

David Bevan: Let's talk about private health. There are reports, in ABC News this morning, that the percentage of Australians with even basic hospital cover has dropped to its lowest level in more than a decade. Steve Georganas, is this something that regularly comes through your doors, people saying 'I don't even know why I bother with my private health'?

Steve Georganas: It certainly is. You know, every day, we hear from people who are saying exactly that but, you know, I suppose these latest numbers on private health insurance… they… makes a greater case for the Government to act immediately to review the system. We need to review the system right now. Now, Mr Hunt claims to have some plan to review and to act on private health insurance but we've yet to see anything, he's yet to provide any detail on what this plan actually is and, you know, we'd support an inquiry into the private health sector and we need to see what his review is and how he plans to go about it but it's obvious that health insurance continues to increase. We went to the last election with a cap on health insurance. Now, you know, we need to see the Government act on this, because our health system is under extreme pressure. We've seen the Medibank [sic, Medicare?] freeze which took place which increased costs to see a doctor, we're seeing it harder to see doctors, but we certainly need to know what the plan is to review the private health system and we're yet to be provided with any detail on this plan.

David Bevan: Simon Birmingham, what's the plan.

Simon Birmingham: Well, Steve Georganas clearly hasn't been paying much attention, because a number of reforms have been made. In April this year, a new classification structure for private health insurance came into effect that seeks to simplify decisions for people who are buying private health insurance, so that you can clearly purchase 'gold', 'silver', 'bronze' or 'basic' insurance policies that are consistent and comparable across different companies. I know that, for many constituents and, frankly, even in our families at times, it has been confusing in the past to understand, when you're buying cover, as to whether you're getting cover that fully covers hospital costs or leaves you a gap and to know, then, how you compare that from one provider to another.

Ali Clarke: So, apologies, Simon Birmingham, just trying to butt in here to move this along, that happened in April – we're now in August and seeing these record low figures, so, in the modelling that would have gone into making these changes, when can we expect to see these changes come into full effect and maybe altering the way that we're looking at this?

Simon Birmingham: Yeah, well, Ali, I would expect these things will take time for consumers to fully take advantage of them and to be able to invest and make those informed decisions. A couple of months down the track is not going to instantly turn around what is a problem that has evolved over time – that's why we went through a very long consultation process. I know that Greg Hunt has said he's going to keep looking at other areas for reform. We've also made changes that ensure more incentives for young people to get involved, in terms of discounts for purchases of health policies by young Australians, and more support for provision of services in regional areas and differentiating that, recognising that not every service will be available in regional Australia and therefore policies ought to address that, so it's not been an area that we've stood still on but the big reforms have really only just come into effect.

David Bevan: Well, there you are, Senator Rex Patrick, it's only a matter of time, everything will be fine.

Rex Patrick: Yeah, well, look, I'm not convinced that that's the case. The Government has made some changes but there's a few realities we need to work with here. Look, we support the idea of there being a choice – Centre Alliance supports that – but one of the reasons people are not buying into private health is because the cost of living is so high. We've had a total policy failure in respect of energy… energy prices here in South Australia and right around the country are skyrocketing… we've got water prices increasing, gas prices increasing, we're about to privatise road transport, or public transport, here in South Australia, which will ultimately cause a rise in prices and that, in my view, is an area of focus that the Government needs to have. We need to bring down the cost of living so that private health choices can be made.

Ali Clarke: Well, on that note, we have to finish. Rex Patrick, thank you for coming into the studio, Steve Georganas, with us, Labor Member for Adelaide, and Simon Birmingham, Minister for Trade, Tourism and Investment.

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