THE carbon tax will trigger a significant transition in the Latrobe Valley and governments need to invest in the region now to assist, according to Latrobe City Council.
Yesterday Latrobe City chief executive Paul Buckley said regardless of whether power stations closed in the Valley in the near future, the carbon tax would ensure the brown coal industry faced a future overhaul and this region would be “one of the most impacted” in the country.
He said there was “no question” high-emitting generators would leave the system “at some point”, whether that be 2020 (as first touted by the government) or as late as 2030.
Mr Buckley expressed concern about recent comments by federal ministers Martin Ferguson and Simon Crean the $200 million committed to structural adjustment support for regions most affected by the carbon tax would be specifically tied to the ‘contracts for closure’ process.
“I think we have a job ahead of us to ensure at least a component of that comes to this region, regardless,” he said.
Mr Buckley said there was a “danger” the money could be reallocated if the government failed to negotiate closures but that “would be a substantial shift from their policy”.
“We argue this money should be tied to regions that will transition, regardless of the timing, and it would give us a better opportunity to more effectively plan for that transition,” he said.
Council has long maintained the key to successful transitioning lay in a diversified economic base, as well as securing investment support for clean coal technologies and potential coal export activities.
A “whole range of initiatives” requiring support have been put to the Federal and State Governments via a submission to the Latrobe Valley Transition Committee and Mr Buckley said council hoped for a response within the month.
Council’s efforts to secure new investment in the region were being hampered by political uncertainty on several levels, Mr Buckley said.
He called for a speedy announcement on whether any local power stations would close as part of contracts for closure.
“The target date (for closures) is 2020, that’s only seven and a half years away now but the longer it takes to get that certainty into the market, the longer it takes to get new investments on the ground and, in anybody’s estimation, it takes about five to 10 years to get approvals for infrastructure of this scale to occur.”
Mr Buckley insisted there was still cause for confidence in the Valley’s future, citing growth at Latrobe Regional Hospital (now the region’s largest individual employer), Monash University, Australian Paper, National Foods and GippsAero as signs of an increasingly diversified economic base.
“Retail is also quite strong and the recreation, health and education sectors continue to grow,” he said, adding although the energy and mining industry was “stagnant” there had not yet been any significant decline aside from “deferred non-essential maintenance”.
“Regional cities will play a greater role in accommodating population growth and we will continue to see the Latrobe Valley, like Ballarat and Bendigo, play a key role there and this requires a high level of infrastructure to convince people to make the move,” Mr Buckley said.
He said the range of local projects put before the Federal Government for funding support, including $65 million to develop LRH, creating “another couple of hundred jobs”, needed to be considered on their merits and within the context of transition challenges faced by the region.