National Security

Transcript │ First Edition │ 21 July 2023

July 21, 2023

Friday 21 July 2023

Interview with Pete Stefanovic, First Edition

Subjects: Australia’s solar network vulnerable to cyber hacking, Jim Chalmer’s embarrassing wellbeing budget data error

PETE STEFANOVIC: Australia's solar network could be vulnerable to Beijing interference says new research shows the sector is dominated by Chinese companies. Live to Georgia Simpson in Melbourne, Georgia, how is this making the network vulnerable?

GEORGIA SIMPSON: Well Pete, almost 60% of Australia's supply of smart inverters – these devices are used to convert energy from the grid into electricity that's used in homes and businesses – are manufactured by Chinese companies, three of which have direct links to the Chinese Communist Party. Anything that has an Internet connection, as we know, is really vulnerable to hacking. And international intelligence laws in China say that any company that supplies these smart inverters can be ordered at any time by Beijing to disrupt, sabotage or spy on power supply. The sector is growing in Australia as the country moves towards a renewable future and although the government has stepped up its efforts to protect the supply from foreign threat, there is nothing specific to these smart inverters. Opposition Home Affairs and Cyber Security spokesperson James Paterson has commissioned some research into the matter and he is growing increasingly concerned about where it leaves Australia's solar supply. He's told The Australian, 'if companies like Huawei are not safe to be the backbone of our telecommunications network, then they can hardly be safe as the backbone of our new electricity grid.' The Home Affairs Minister, Claire O'Neill, says the government is working towards making sure that we have more domestic manufacturing capabilities so we don't have to rely on overseas high-risk vendors.

STEFANOVIC: Okay, Georgia, thank you. Well, let's bring in James Paterson now. James, explain to me as a layman, what are smart inverters?

SENATOR PATERSON: Good morning Pete. These are inverters which are internet connected, and their role is to connect the solar panels on the roof of your home or your business to the grid and make it work, and they have a completely innocent and straightforward purpose. The problem that we have is that in Australia, the smart inverters that are being installed by their hundreds, if not thousands every day right now are predominantly manufactured by Chinese firms, including companies like Huawei. Now, all of these firms are subject to China's intelligence laws. Some of them have very close links with the Chinese Communist Party. For example, the founder and president of one of the major firms, Sungrow, was a delegate to the National People's Congress. Now, you don't get to hold a position like that without being a Chinese Communist Party member and a member in good standing. And you understand your obligations to the Party, which is to put the Party's interests before everything else, certainly before your own interests and the interests of the country to which you might be supplying these solar inverters. This is a problem because the Labor Party has a target of 82% renewables by 2030, in just seven years. And yet right now, despite being aware of this risk, Anthony Albanese and Chris Bowen have talked about it, they've done absolutely nothing at all and we're going to find ourselves in a situation where our grid is absolutely riddled with these inverters with known cybersecurity vulnerabilities.

STEFANOVIC: So I mean, if China wanted to be sinister about everything, what information could they take, or would it not be about that? It would just be about sabotaging the power grid and just causing mass disruption?

PATERSON: Well, experts have said that the real danger point comes when these products reach a critical mass, when they reach a significant proportion of our rooftop solar and therefore a significant proportion of our electricity grid. And then that could be disrupted by an external party, by a signals intelligence agency like the People's Liberation Army's cyberspace force or the Ministry of State Security cyber hacking unit. And that could not just damage those inverters and that source of power, it could actually do damage to our grid as a whole and take our whole grid offline. Right now in Europe, Pete, European governments are doing everything they can to reduce their reliance on an authoritarian power in their region, Russia, having control over their electricity network. But in Australia we appear to be under the Albanese government doing everything we can to increase our dependence and increase our reliance on the authoritarian power in our region, the Chinese government. I mean, energy security is national security. And if we don't have energy security, we don't have national security. So I'm really worried that the government has no plans to deal with this problem.

STEFANOVIC: So this is a real national security problem here, a real national security risk. If that energy grid was to shut down, I mean, it could cause all kinds of problems?

PATERSON: Well, exactly right. And Huawei was banned from our 4G network, our 5G network and the NBN, because on a bipartisan basis over a decade we all agreed that they couldn't be trusted to be the backbone of our telecommunications industry. And yet we appear to be trusting them to be the backbone of our new energy system. I mean, it's self-evident why a company like that shouldn't be involved. Unfortunately, the other Chinese companies that are involved are subject to the same extrajudicial controls of the Chinese Communist Party and therefore pose the same risk.

STEFANOVIC: So what should people do? What should the government be doing here? I mean, more and more people are taking up solar panels and presumably, you know, having these inverters on their roofs. So what does the government need to do?

PATERSON: The government says that they're thinking about looking at maybe one day having a domestic industry which could possibly replace this. But this is happening right now, it will be far too late by the time some Australian industry is up and running. I mean, my view would be that the government would have to explain why a company like Huawei shouldn't be banned from supplying these kind of products, given that they have been banned from our telecommunications network. And they have to look at every other possible mitigation for these other companies. They provide about 60% of the Australian market, so clearly about 40% of the Australian market are non-Chinese companies that are not linked to the Chinese Communist Party. So there are other options out there, but the government just doesn't seem to have even thought about this, let alone undertook any planning for it. And it's them who legislated this renewable energy target, it is them who's rushing to do this, so it is their responsibility to put these protections in place now.

STEFANOVIC: I think these are important, fair points to make, James. Just while I've got you, some details this morning on the Treasurer's wellbeing budget, much of it based on information that's already out of date, it turns out.

PATERSON: This is a very embarrassing stuff up by Jim Chalmers. I mean, wellbeing data from before the pandemic might as well be wellbeing data from the last century. We all know how much the world has changed, particularly when it comes to things like mental health and the wellbeing of young people and their schooling that was disrupted by the pandemic, about the epidemic of loneliness and the other issues that we're having. So to rely on data and to make any meaningful inferences about it that has come before 2020 is really very embarrassing. And I think it shows that the Treasurer has got all of his priorities wrong. He should have a laser like focus on getting inflation under control so that we can deal with the cost of living crisis that Australians are facing. But instead he's looking at old data to make him feel good about the wellbeing of Australians.

STEFANOVIC: Okay and the Treasurer coming up in a bit over an hour's time, he's got a press conference talking about that. We'll see what he says. James Paterson, good to see you thank you.

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