Download The Nationals Liberals Minority Report Inquiry into the Closure of Hazelwood and Yallourn Power Stations here
Minority Report Summary & Recommendations
The Latrobe Valley’s prosperity was built on harnessing an abundant brown coal resource into low cost and reliable electricity through advances in coal-fired power generation, hard work and ingenuity from a post-World War I workforce of predominantly European immigrants and returned service personnel.
The use of Latrobe Valley’s vast brown coal resource for power generation and related purposes shaped the history, economic profile, and identity of the Latrobe Valley for over a century. It along with the Maryvale paper mill and associated forest industry has driven prosperity and growth across the state of Victoria and more broadly nationally. The Liberals and Nationals members acknowledge and respect the endeavours of all workers who have contributed to the development of Latrobe Valley.
The closure of Hazelwood Power Station, and changes to reliance on brown coal, has affected the Latrobe Valley in a range of different ways that have contributed to job losses, increased unemployment and to economic and social uncertainty. The Latrobe local government area (LGA) is at the centre of these adverse outcomes.
The Worker Transfer Scheme developed for the closure of Hazelwood will be insufficient for future power station and coal mine closures, given the substantial contraction of the coal fired power industry and a diminished forestry, sawmilling, and paper industry due to the Andrews Government’s abandonment of the native timber industry.
Established in November 2016, the Latrobe Valley Authority (LVA) spent approximately $290 million over five years. The LVA has failed to achieve the socio-economic outcomes in the Latrobe Valley that minimises job losses and economic loss. It has not maximised socioeconomic opportunities which leverage off Latrobe Valley’s resources, infrastructure, and skills base. The LVA was established to transition displaced Hazelwood workers and impacted contractors, deliver sustainable jobs growth and offset economic decline in the Latrobe Valley. It has not delivered on important key performance indicators (KPIs). Over the past decade the Latrobe LGA labour force has declined by approximately 4,350 jobs, while on average each of six other regional labour force have in contrast gained approximately 10,070 jobs. Latrobe LGA unemployment is just under 8 per cent as at December 2021, which is about twice the average of Ballarat, Bendigo, Geelong, Mildura, Shepparton and Wodonga.
The Liberals and Nationals hold the view that little real socioeconomic benefit will come from the $7.5 million provided in State Budget 2022-23, as the majority of funding will be allocated to staff salaries and operational costs. Successful regional transition requires sufficient long-term government funding and support. Providing funding in advance of Yallourn’s closure will provide businesses time to scale up and make investments decisions that create sustainable future employment opportunities for Yallourn workers and the job losses from the native timber and forest products industry under the failed Andrews Government ‘Victorian Forestry Plan’. A recommendation for substantial funding in advance was supported in submissions by Jane Oakley (renewable energy consultant), Liz Westcott (Chief Operating Officer, Energy Australia), Tony Cantwell (Committee for Gippsland).
International experience from transitioning away from coal-fired power, indicates that the significant socioeconomic benefit of traditional power generation will not be replaced by one single industry or large-scale employer. Instead, a combination of new businesses and industries will be required to offset the economic and social changes and impacts resulting from the closure of the Hazelwood, Yallourn and Loy Yang power stations.
Growing established enterprises with a regional footprint and supporting new commercially viable technologies, and value-added products and services are vital for a prosperous future. New large-scale renewable energy projects across the Latrobe Valley and Gippsland will provide a significant number of jobs in construction. Timeframes for construction range from five to ten years, which will offset some of the job losses from the closure of the region’s power stations for a fixed period. A permanent workforce will be required to run and maintain renewable facilities but not to the magnitude of the coal generators. A diverse and multi-skilled workforce will need to emerge.
Global demand for renewable energy components and shipping constraints may delay some renewable energy projects (eg. ships capable of transporting wind turbines are booked until 2026). Government support, timely regulatory approval, along with complementary policy and funding can help attract and ensure timely completion of renewable energy projects.
Victoria needs appropriate rehabilitation strategies for coal mines and assets to reduce future risks of mine fires, subsidence, and other adverse environmental impacts. Victoria also needs similar rehabilitation requirements and rehabilitation bonds for large-scale renewable energy assets given potential adverse environmental impacts of materials and components used in these renewable technologies.
Synopsis of Minority Report Recommendations
For the closure of Yallourn, the Victorian Government needs to implement a successful transition based on discussions with Energy Australia and impacted workers, businesses, and communities. Sufficient funding to cover the development of new and expanded industries to generate ongoing jobs and to oversee worker transition should be managed by Regional Development Victoria – Gippsland. The planning, funding, and wise implementation needs to start immediately to identify affected businesses, quantify impacts and implement solutions.
The Victorian Auditor General’s Office (VAGO) be asked to investigate the effectiveness of the Worker Transition Service and Worker Transfer Scheme and recommend improvements for future services and schemes. This analysis should include the extent to which affected workers’ needs and priorities have been and/or are able to be met.
The Victorian Government should undertake an analysis of future Latrobe Valley job creation opportunities and prepare a plan for new and enduring employment in the Latrobe Valley in consultation with stakeholders and release a detailed job plan by June 2023. This should be complemented with a strategic analysis of future transitional services and training requirements to support workers following the closure of Yallourn and prepare them for new job opportunities for release by June 2023.
The Victorian Government publish six monthly small area labour market employment data (SA3) for each of the six Gippsland LGA’s which is comprised of Latrobe, Baw Baw, South Gippsland, Wellington, East Gippsland and Bass Coast) report on changes to employment attributed to major industry closures.
The Victorian Government needs to work more closely with the Latrobe City Council on the region’s economic transition, given Latrobe LGA continues to bear the brunt of adverse impacts of the transition away from coal power generation.
 Ms Erin Coldham, EIC CHYPS, Transcript of evidence, March 2, 2022, p. 50.
Minority Report Recommendation 1: That for the closure of Yallourn Power Station the Victorian Government implement appropriate measures that meet current and future needs of a successful transition based on discussions with Energy Australia, impacted workers, businesses and communities. The measures shall consist of funding to Regional Development Victoria – Gippsland, to cover the development of new and expanded industries to generate new direct and ongoing jobs with a funding stream and sufficient expertise to oversee worker transitional arrangements.
Minority Report Recommendation 2: That the Victorian Auditor General’s Office (VAGO) be asked to conduct an investigation into the effectiveness of the Worker Transition Service and Worker Transfer Scheme and recommend ways to improve future services and schemes. This analysis should include the extent to which affected workers’ needs and priorities have been and or are able to be met.
Minority Report Recommendation 3: That the Victorian Government will work with Energy Australia in advance of Yallourn’s closure and identify affected businesses and quantify the impact of closure on those businesses.
Minority Report Recommendation 4A: That the Victorian Government undertake an analysis of future Latrobe Valley job creation opportunities and prepare a strategic plan for employment in the Latrobe Valley in consultation with Energy Australia and release a detailed jobs plan to the public by June 2023.
Minority Report Recommendation 4B: That the Victorian Government undertake an analysis of future transitional services and training requirements vital to support workers following the closure of Yallourn and prepare them for new job opportunities. Release a detailed transitional training plan to the public by June 2023.
Minority Report Recommendation 5: That the Victorian Auditors Generals Office (VAGO) be asked to conduct an investigation into the effectiveness of the functions of RDV and LVA and recommend future arrangements that avoid duplication and maximise the proportion of funding on service delivery and streamline administration costs. (noting the Minority Report recommends to the disband the LVA)
Minority Report Recommendation 6A: That the Victorian Government publish employment figures six monthly for the six rural LGA’s (Latrobe, Baw Baw, South Gippsland, Wellington, East Gippsland and Bass Coast) and changes to employment attributed to major industry closures, such as Hazelwood and Yallourn, and the native timber industry.
Minority Report Recommendation 6B: That the Victorian Government work more closely with the Latrobe City Council in relation to any future Government measures to aid the region’s economic transitioning given that Latrobe LGA has been most affected by past closures and is now the most disadvantaged LVA in the region.
Minority Report Recommendation 7: Removed due to position to disband the Latrobe Valley Authority
Minority Report Recommendation 8: That the LVA focus on delivering effective transition plan with outcomes and not spend any of the 2022-23 Budget allocation of $7.5 million on self-promotion with its final 12 months of funding.
Minority Report Recommendation 9A: That the Victorian Government discard the Victorian Forestry Plan and continue with sustainable harvesting of native forests. The Victorian Government must work with VicForests to continue to maintain practices which enhance healthy, sustainable, and productive forest systems.
Minority Report Recommendation 9B: The Victorian Government prioritise research funding to Federation University to enable localised procurement of innovation, research and development and associated training. This will deliver new jobs and help offset some of the job loss under closure of coal-fired power stations.
Minority Report Recommendation 10: That the Victorian Government develop a residual risks policy for the mines at Hazelwood and Yallourn. The policy should address risks associated with ground instability, fire and toxic or dangerous materials
Minority Report Recommendation 11: That Governments increase funding to ACI given their potential to create new industries with ongoing jobs.
Minority Report Recommendation 12: That the Victorian Government support the establishment of a Carbon Research and Innovation Centre as proposed by Australian Carbon Innovation and Federation University with the proviso that it have strong industry participation and focus on the entire chain from fundamental research à applied research à development à pilot trials à commercialisation.
Minority Report Recommendation 13: That the Victorian Government introduce bonds (similar to retiring coal fired power plant bonds) for large-scale solar energy, wind farms and large-scale battery facilities to ensure sufficient funds are available for site rehabilitation.