Interview with Chris Kenny, Kenny on Sunday Sky News

Transcript

16 September 2018

E&OE

CHRIS KENNY: Now, let me get on to our next guest. Joining us live from Goulburn in his electorate is the new Energy Minister Angus Taylor.

Thanks for joining us, Angus.

ANGUS TAYLOR: Thanks for having me, Chris.

CHRIS KENNY: Now, of course we've talked before about the National Energy Guarantee policy and the need to scrap it all together. That happened last week. Officially, Cabinet and the Party got rid of the NEG. So the NEG is dead, but Labor now want to revive the NEG. The Labor Party like Malcolm Turnbull's and the Coalition's old National Energy Guarantee.

ANGUS TAYLOR: Well it's worse than that, Chris. They don't just want to revive it, they want to revive it with a 45 per cent emissions reduction target. This is virtue signalling with other people's money, because what happens when you have a target like that is you drive up the price of electricity, you drive out the base-load, reliable power - much of which is coal and gas to a lesser extent - and you make the whole system less reliable, as well as far, far less affordable. Now, we've seen this in South Australia, Chris, where we have amongst the highest electricity prices in the world, on the back of Labor's target there of a 50 per cent renewable energy requirement. That has led, as I say, to amongst the highest electricity prices in the world, the highest in Australia. There are very few countries higher than South Australia, de-industrialisation, loss of jobs and of course households are really struggling in South Australia to make ends meet. So Bill Shorten wants to take that state government experiment and take it national. It will be a wrecking ball to our economy.

CHRIS KENNY: I'll come to those state government moves in just a moment but of course Bill Shorten taking up the NEG and your strong response there, just underscores the point doesn't it? That this is the reason we ended up with a new prime minister. This is what did Malcolm Turnbull in, the National Energy Guarantee. Coming up with an energy policy and a climate policy that Labor could agree to.

ANGUS TAYLOR: Well I think the important thing is we can cleanly focus unrelentingly on getting prices down Chris. There's no distractions here. Nothing will get in our way. We want lower prices while we keep the lights on and we won't allow anything to get in our way. Bill Shorten has one bigger impediment and that's his 45 per cent emissions reduction target and of course he's talking about the mechanism he's going to use to get to that outcome. Well, the outcome will be bad, that's for sure, because we'll end up with higher prices. Meanwhile we'll be focusing on taking action by ensuring there's investment in new generation, backing investment in new generation; making sure that the rip offs from the big companies are stopped; and making sure that the customers have a safety net, a fair price when they don't have hours to spend on the phone negotiating.

CHRIS KENNY: All right. Now the point is though, that your prime minister and others are still saying they're going to meet the Paris emissions reductions targets and Scott Morrison is saying that there's no cost implications in meeting those targets for Australian electricity. But we've seen over the past decade massive intervention in the electricity centre, the Renewable Energy Target all sorts of solar and other subsidies. It is those interventions that have driven up prices to where they are today, isn't it?

ANGUS TAYLOR: Well that's right Chris and you know I've argued strongly against them but that's exactly why we shouldn't be focusing on that now. We should move away from that focus, to a focus on price and that's exactly what we're doing.

CHRIS KENNY: But it's the obsession …

ANGUS TAYLOR: Scott Morrison's has given me …

CHRIS KENNY: [Interrupts] It's the obsession with emissions reductions that's led to the price increases, so how can you deliver price reductions if you're still going to be committed as a government to these global emissions reductions targets?

ANGUS TAYLOR: Chris, let me be very clear, I can't be any clearer: we are not going to allow any distraction to get between us and reducing electricity prices. There's two reasons for that. One is there's been so much focus on emissions in the past it's time to focus on price - you made that point and I absolutely agree with you. The second is because of all of that, we're going to reach the emissions- 26 per cent emissions reduction target anyway. So we don't need to worry about it. Put it to a side, focus on price. Bill Shorten can't do that because he set himself a 45 per cent emission reduction target. We're going to just get back to basics, focus on the things that really matter to electricity customers which is affordable baseload electricity that can keep the lights on.

CHRIS KENNY: Well you mentioned what the states are doing. We've all seen what's happened in South Australia where they've got close to 50 per cent renewable energy now, the most expensive energy in the western world and they've had a state-wide blackout and all the rest of it. Last week the Victorian Government, Daniel Andrews announced more state government subsidies to get six more wind farms up. He wants to get Victoria up to 45 per cent renewable energy. If South Australia and Victoria are both around the 45-50 per cent renewables, what will that do to national electricity reliability and cost?

ANGUS TAYLOR: Well it's worse than that Chris, because Queensland is pursuing similarly high targets and if Labor get into government, God forbid, because we should all be worried about the implications of that, then that will add to it again and the result will be very clear. We've seen it before, we've seen it in other markets, and we've certainly seen it in South Australia: it will push out the baseload power. The intermittent generation that's being stuffed into the sector, into the national electricity market, will have to be backed up and that's extremely expensive. The networks will have to be rebuilt to absorb all of this new intermittent capacity coming in and we're all going to pay for it. And that's why I say this is virtue signalling with other people's money. Daniel Andrews is standing up there saying he's going to be virtuous, as he defines it, and you're all going to pay for it. He doesn't have to pay for it. It's not the government that pays for this. It's all of us. And the worst thing Chris, is it's not just in our electricity bills, it's that jobs you destroy, the industries that come out because they rely on low cost- the competitive electricity this country has relied on for decades. Daniel Andrews is determined - as is Bill Shorten, as has been the past Labor governments in South Australia and the current Labour government in Queensland - they are determined to get electricity prices up and destroy those jobs.

CHRIS KENNY: But Angus Taylor, you know that most of these push into renewables, certainly in South Australia and in the other states has happened because of federal policy because of a Coalition and Labor policy - they both backed the Renewable Energy Target - and these new investments are being built under the Renewable Energy Target too. What can Canberra do? Why don't you scrap the renewable energy target where it is now? What else can you do to stop this?

ANGUS TAYLOR: Let me be clear about this: these projects aren't being driven by the federal Renewable Energy Target. The projects we just talked about are being driven by state-based targets and the first and most important thing we can do is call them out, Chris. Call them out, because the federal subsidies are disappearing in the coming years. The states, the Labor states are determined to have their own. We need to call them out on the costs they are creating for everybody. When all of that extra wind power and large scale solar and even household solar needs to be backed up, backed up by the coal or gas or other generation that's dispatchable, that you can call when you need it, then it costs all of us. It's very expensive and the most important thing we can do is tell the people of Victoria, tell the people of Queensland that if their governments are going to do this they're all going to pay for it - not the government. They are going to pay for it.

CHRIS KENNY: You got to do more than call it out. I mean we've seen just in the last week or so both in Victoria and South Australia state governments have announced new policies where they're handing out money to householders to put in solar energy packages, to put in battery packages. A Liberal Government now in South Australia handing out people money to have batteries installed in their houses. More taxpayers' money. Now I suppose this helps you a bit because it reduces the demand on the grid, but it still doesn't give you the reliability of supply you need when those batteries are flat. And it's still taxpayers' money being spent. I mean how can Canberra actually get in there and do something to stop this?

ANGUS TAYLOR: Well it's pretty small bikkies what the Victorian government's adding to try and make the whole system more reliable, to be frank. Chris, there are enormous amounts of intermittent generation being added in Victoria and in in other Labor states - Queensland - that are causing us problems. But look, the one piece of the NEG that we are hanging on to, that's very important here, is the reliability guarantee. And this is saying if you are going to put in this intermittent generation, then you have to pay for it. You have to make sure that the system can actually deliver and it is the piece of the NEG that is critical to continue with. The NEG itself is gone, but we are hanging on the reliability guarantee because that will force the states to ensure that they do provide this baseload power, and if they don't, they're going to pay the price.

CHRIS KENNY: Now you mentioned earlier the virtue signalling that's involved in these policies. Can you just be frank with us, and frank with Australians, and tell us that the 26 per cent emissions reduction target that Australia signed up to Paris, while global emissions are increasing by vastly greater amounts than that, is an example of Australian policy virtue signalling? That the enormous cost and dislocation we're going through on energy will not improve the global environment, will not save the Barrier Reef, it just enables Australia to say that we're doing our bit?

ANGUS TAYLOR: I understand that point of view Chris. The point I'm making though is a simple one. It doesn't matter about whether or not we're targeting 26 per cent emissions reduction in the electricity grid because we're going to get there anyway. We're going to get there anyway. So let's put it to the side and let's focus on price. That's my simple point. It is not going to be a factor that will influence any of our decisions and it doesn't need to be. We can ensure that prices do come down, that we can keep the lights on without having to worry about that target because it's not going to constrain us in any way shape or form.

CHRIS KENNY: Well, we know that AEMO and others have talked about the Liddell coal-fired power station in the Hunter Valley in New South Wales and how the fact that when it closes in a few years time that will increase the upward pressure on prices and create probable problems for reliability of supply. Will you intervene there, will the new Morrison government look at intervening in Liddell to try and extend the life of that particular large coal-fired power station?

ANGUS TAYLOR: Chris, we've said two things that relate to Liddell or any other power station that might be looking at exiting the system because of all these renewables coming in. The first is, we will back investment in new generation that increases supply and keeps competition in the market. We've said we'll do that. We're working through the mechanism now. We'll have more to say about that in the coming months, but this is a very, very important part of our policy. We're going to back investment that we need in that reliable baseload supply. We have also said, that if we have to, we'll create powers of divestment so that if a big company decides they want to close a big generator that is needed in the system to keep it affordable and reliable, then we'll establish powers and we'll make sure there are powers in place to force divestment of those assets under those circumstances. Now, that's a big step forward. Australia has never done this in any sector but we've said we're prepared to do that if it appears that we're going to lose a big piece of baseload reliable power that puts upward pressure on prices and, unfortunately in many cases, can also lead to an unreliable system where you get blackouts. So these are two very, very important steps forward.

CHRIS KENNY: [Talks over] So, you could apply that legislation to Liddell? Are you considering applying such legislation to Liddell?

ANGUS TAYLOR: Well, Liddell is a big baseload generator. Now, we need that baseload generation in the system. It keeps the lights on and it keeps the prices down. They're getting pushed out, as more and more renewables are pushed in by these state targets, the risk is that we lose those big machines in the system that keep our lights on and keep the prices down. And we're prepared to take those pretty drastic actions if we have to, Chris. We'd prefer not to, obviously, but if we have to, we'll do it.

CHRIS KENNY: Now, Tony Abbott - God love him - has been out there spruiking for nuclear energy. Now, as I understand it, it's a long way from being financially viable in Australia at the moment. But he has a point doesn't he? If we're going to be technology agnostic as Malcolm Turnbull used to say when it comes to our energy production, surely we should change the legislation to get rid of laws that outlaw the use of nuclear energy.

ANGUS TAYLOR: Chris, I understand the argument he's making. The point is, that I have one very, very simple goal, which is, to get prices down in the short to medium term. I don't have a lot of time to do this; we've got six more, eight more months, however long it is before the next election. I want to make real progress in that time in that goal. Nuclear's not going to help me in that process. As you know, it's a long way off. I know that sector pretty well. I've worked in it in the past and it's a long way off actually solving the real problem we've got to face up to, and we are facing up to right in front of us now, which is how do we drive prices down while we keep the lights on.

CHRIS KENNY: Okay, you haven't been in politics a hell of a long time. You gave up a successful business career to get into politics. You've seen an enormous amount of policy, political, personal and leadership upheaval during that period. Do you think that having lost the prime ministership then it's a good thing for the Coalition and the Liberal Party that Malcolm Turnbull has left politics altogether?

ANGUS TAYLOR: Look, that's a decision for him, Chris, about what he wanted to do after losing the prime ministership. Look, I think the critical issue for us now is to unite behind Scott Morrison. I think he's doing a fantastic job. The feedback I'm getting on the ground in my electorate and elsewhere about Scott is very, very positive, and very quick to get such positive feedback because he is out there representing the suburbs, the regional centres like where I am right now in Goulburn. He has a real understanding of the people who live in these places and I think he is already having a real impact. And I think that's a great thing. Past prime ministers have got to make their own decisions about what they do, Chris, and I'm not going to tread on that territory.

CHRIS KENNY: Yes but as you know and as you mentioned, unity is absolutely critical and we've seen all sorts of leaking and backstabbing and counterclaims since the leadership change and I was wondering that if you thought - if anyone thought - it was a good idea Malcolm Turnbull got out of parliament, whether or not the Coalition might be better off if Tony Abbott left at the next election as well, to take all that bitterness and division and all those leadership tensions out of the party.

ANGUS TAYLOR: Look, Chris, I've made a point of not giving advice to former Prime Ministers. Once you've been prime minister of this country you deserve the respect of being able to get on with life as you see it. And I'll stick to that principle.

CHRIS KENNY: Well, just on a, I suppose, tangentially related issue that claims of bullying against female Liberal MPs certainly amplified by some female Liberal MPs. Do you believe there's an element of the leadership trauma factional score settling in the way these bullying opaque, really nebulous, bullying claims have been put about the place?

ANGUS TAYLOR: Look, I don't stand for bullying in any way, shape or form, Chris. I didn't see any but, as you know, Scott is dealing with those claims. I certainly didn't see any signs of it. These are pretty tough contests. They really are. They take a real toll, Chris. We'd all prefer they didn't happen at all. I mean, they are really tough situations and I can feel why people become emotional during the course of them and afterwards. That's completely understandable. The job now though, is simple: focus on the Australian people, focus on what they need, focus on doing our jobs. And I can tell you, my job, my goal is clear, Scott made my goal very, very clear from day one, and it's to work on those electricity prices. And that's what I'm spending every day thinking about and working on.

CHRIS KENNY: Well, I'm certain most Australians would say all power to you in those endeavours. Angus Taylor, thanks for joining us.

ANGUS TAYLOR: Great. Thanks for having me, Chris.

CHRIS KENNY: Angus Taylor there, live down the line from Goulburn. I might pop into Goulburn on the way home tomorrow, take the kids there for a meal, nice town is Goulburn.

Minister for Energy