Challenge for new Resources Minister

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Australian Broadcasting Corporation

Broadcast: 25/03/2013

Reporter: Emma Alberici

The government's newly appointed Minister for Resources, Gary Gray, discusses the challenge of administering the mining tax and gaining the trust of the resources sector.


EMMA ALBERICI, PRESENTER: Our top story is the reshuffle of Government ministries.

Our guest tonight is Gary Gray, who initially rose to prominence in the Labor Party as the national secretary during the Keating Government.

He left politics to spend seven years as a senior executive with Woodside Petroleum, the country's biggest oil and gas producer.

Gary Gray has left his post as Special Minister of State, promoted to the cabinet replacing Martin Ferguson as Resources Minister. He also takes on Tourism and adds Small Business to his workload.

Mr Gray joins us now from our Parliament House studio.

Gary Gray, congratulations on your new roles.


EMMA ALBERICI: Now, three big portfolios. Realistically, what can you achieve in just five months?

GARY GRAY: I think the important thing, Emma, is to ensure that, to the extent possible, it's business as usual, that confidence is given to our big resource investors, that we keep the progress that's being made to support small businesses and that we understand the tough times that tourism's going through around the country. I think in the context of energy and resources, I'm fortunate following a high-profile, highly successful minister who sat comfortably in the mainstream of Resources ministers for our country, following Ian Macfarlane and others, I think I fit comfortably in that vein and I hope to do my job as well as I possibly can.

EMMA ALBERICI: Let's focus on the Resources brief. Your appointment has been welcomed by the mining industry, but they say you're taking on a portfolio that's in desperate need of reform. The local miners are pointing to the fact that they're no longer in their view internationally competitive, particularly because of rising production costs. What can you do to help them?

GARY GRAY: Well I think it's right to say that as we look to the future for our extractive industries, we see price uncertainty, some softening in markets and that's been well and truly flagged both by analysts but also by the Australian Government over the course of the last four or five years. So there should be no surprises on that front. However, Emma, our need to continue increasing our volumes means that we do have to ensure that cost pressures are kept to a minimum so that we can ensure a profitable mining sector. Now, I'm not about to suggest that I inherit a portfolio full of troubles and problems out of the cost pressures that we face, but I do think it's reasonable to say that we understand the problems that we face as one of the world's great resource exporting countries and we also have the wit and the capacity to think through what some of those solutions might be.

EMMA ALBERICI: Your predecessor thought the introduction of the mining tax could've been handled better. What's your view on that?

GARY GRAY: Well I think I'm well and truly on the public record as saying that and then doing something about it. I think the Mineral Resource Really Tax is a tax which brings many of the elements - the idea of having a profit-based tax, understanding that the way in which it was introduced was less than perfect, but Emma, understanding now that with the MRRT and with the increases in royalties that various state governments have introduced, we now have a minerals sector that's contributing to the coffers of state and federal governments in a way that has never happened before and that's a good thing.

EMMA ALBERICI: I think the observation was also relevant across other portfolios being a need generally to improve the way policies are debated and developed both inside and outside the cabinet. Do you agree that there's a need for improvement there?

GARY GRAY: Emma, if you're referring to comments which my predecessor Martin Ferguson made, he sat inside the cabinet for nearly six years. I, if I'm lucky, will sit inside the cabinet for the 150 days before the writ's issued in August. I'll do my job as well as I possibly can. I'll be accountable both to my peers and to my colleagues and do my job as well as I can around that cabinet table.

EMMA ALBERICI: But I'm asking you: do you share the frustrations of some of your colleagues about the way certain policies were handled?

GARY GRAY: No, I think I share regret in the context that one would always hope that everything that you tried worked as well as it could. I made clear publicly and privately in 2010 my objection to how the RSPT had been both conceived and framed. I further made clear my objections to the way in which the argument was prosecuted. And so in that context I fully understand. I think the MRRT, which is born of that process and born of substantial industry consultation and discussions, is an attempt to bring some reasonable level of policy and tax clarity to that situation while at the same time, as I've said, creating a situation whereby our resource industry is now paying its way across state jurisdictions with substantially increased royalties and also contributing through the MRRT.

EMMA ALBERICI: You've been praised for your work in helping bring in foreign workers for major projects in Western Australia. In your experience, are mining companies rorting the 457 work visas?

GARY GRAY: I don't think they are, but if rorting were to be taking place, then I certainly think it should be stood on and stamped out. I do think it's important that as a country we ensure that we do not face cost pressures due to a lack of skilled workers. Now the world has a lot of skilled workers available to us as a country and we have a demand to ensure that projects get built on time and on budget. So with good and insightful migration policy, I do think it's possible for us to balance the critical need to ensure that Australians get the job opportunities that they deserve and that we ensure that our projects get the skills that they need to go forward.

EMMA ALBERICI: When you resigned, Martin Ferguson said the Gillard Government had entered into class war which was damaging the Labor Party. Is that a fair criticism?

GARY GRAY: No, I don't think it is. And I didn't see that class warfare myself. I think that when Martin departed he was in a frame of mind to attack and that's what he did. I don't place a lot of weight on that because I know the serious contribution that Martin made to public policy, to the process of rebuilding Labor after the defeat in 1996 and I think he made a terrific contribution. I think he left angry and upset about a number of things.

EMMA ALBERICI: Well let me ask you: when Wayne Swan launched his attack on the big mining entrepreneurs last year, what was the reaction in your electorate?

GARY GRAY: Well, we're pretty robust people and miners are pretty robust. And I think if you enter into public life and public debate, you should be a little cautious about the language that you throw around, whether that language be accusing others of entering class warfare, or whether that language be the robust language that was thrown around at the time of the mining tax. Our public debate has from time to time over last five years got a little out of control and out of bounds of what, Emma, we'd normally think of as the mainstream of thoughtful political debate.

EMMA ALBERICI: So it wasn't appropriate for Wayne Swan to say that mining billionaires were threatening democracy?

GARY GRAY: No, I think Wayne's a big boy who argues his political arguments strongly. And I don't think Martin was complaining about that, or at least at the time he didn't complain about that. I think it is reasonable for us to accept, as I have in public forums where I've been present with very substantial mining figures, they're robust about their arguments, they're confident people and they're also fun to engage with.

EMMA ALBERICI: Do environmentalists have anything to fear about your appointment to the Resources Ministry?

GARY GRAY: I'd sincerely hope not. I think that our resource industry rests on a secure and sound environmental approvals process. And Emma, we have to get those processes right in order to give certainty to the projects which need effectively bankable approval processes. So, in my view, a good approvals process is as essential to a successful mining operation as good engineering and sound banking.

EMMA ALBERICI: The Greens Leader Senator Christine Milne says that by appointing you as Resources and Energy Minister the Government is it now in retreat on addressing global warming.

GARY GRAY: Well, I wouldn't expect my appointment to be applauded by the Greens. I wouldn't ask that. I'm not a Green. I'm a Labor minister. I've been a member of the Labor Party since I was 16. I am not a Green, Emma, and any Green who thinks I am a Green is sadly mistaken.

EMMA ALBERICI: We all understand the shortcomings of minority government, but do you think the Greens have had too much sway over the Gillard Government?

GARY GRAY: No, I don't. It's been a government that's worked in difficult circumstances, but remarkably successfully. A government that's had to bring together majorities on the floor of the Parliament and has passed a record number of items of legislation. So I think it's been a successful parliament, a difficult parliament and trying at times, but Emma, it's been most trying for Tony Abbott who's been most unsuccessful at being able to put together majorities on the floor of the House to prosecute and support his arguments.

EMMA ALBERICI: Are you a climate sceptic?

GARY GRAY: No, I'm not. I was. I was. I was a vocal climate sceptic. And as national secretary of the Labor Party I said things that frankly, Emma, nowadays embarrass me when I hear it played back.

EMMA ALBERICI: Did you say that, "... climate science was middle class conspiracy to frighten schoolchildren"?


EMMA ALBERICI: And you called it "pop science"?


EMMA ALBERICI: What changed your mind?


EMMA ALBERICI: So can I just clarify then: do you reject now the Lavoisier Group, the climate deniers, and do you accept that the globe is warming and that human activity is responsible?

GARY GRAY: I don't think there's any doubt about that conclusion, but equally, Emma, there is no doubt that I attended the inaugural meeting of the Lavoisier Group and I counted and still count as friends members of that organisation. I just don't agree with them anymore.

EMMA ALBERICI: So you do agree then that it's human activity that's causing the globe to warm?

GARY GRAY: I think there's an undeniable connection between human industrial activity and carbon pollution that we need to address, that we should address and also that we can address.

EMMA ALBERICI: Labor now holds just three of the 15 federal seats in Western Australia in your state. The Prime Minister is travelling to Perth tomorrow. How significant is that trip given that state Labor made it very clear during that election campaign that she wasn't welcome then?

GARY GRAY: I think the state Labor Party had every right to make the state campaign about state issues and about the state Labor Party. And it's absolutely true they did not want federal issues, federal personalities or the Prime Minister present during the course of that campaign. That's not unusual. When I was a young party organiser, I can recall Neville Rann in New South Wales making similar edicts. It's not uncommon in the process of politics. But you know, the contest at the next election isn't between Julia Gillard and Colin Barnett in Western Australia, it's a contest between Julia Gillard and Tony Abbott, and I know who wins that contest.

EMMA ALBERICI: When you were Labor's national secretary back in 1996, you ran Paul Keating - or the Keating Government's, I should say, election campaign and lost. Paul Keating in fact blamed you for that loss. And of that loss, you said, - and I quote - "It wasn't just that we lost their votes; we lost their confidence. We no longer represented anything that these people thought was important". Is there a risk that history's repeating itself?

GARY GRAY: You know, from time to time political parties go through truly difficult experiences and 1996 was that writ large. I think there are fundamental differences today. I think - and I see this in my own patch in Kwinana, in Rockingham and in Mandurah. I see - and I saw it on Sunday at Secret Harbour, a little locality in my electorate, where people genuinely understand the strength of the Prime Minister, her determination and they get that the Prime Minister has a vision for this country. They get that we have a vision for the country and that it includes them, their children and their futures. That's something that I believe people can and will support.

EMMA ALBERICI: Gary Gray, I appreciate the time you've taken to speak to us tonight. Thanks very much.

GARY GRAY: Thank you.


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