1 July 2019
JOHN STANLEY: I know the Energy Minister Angus Taylor, who's got the specific brief to get power prices down, was listening to all of those calls and he can answer a lot of the questions about particularly what's happening with this standing offer, the change that applies from today because quite a few people are going to be better off. He joins us on the line now. Minister, good morning to you.
ANGUS TAYLOR: Thanks for having me, John.
JOHN STANLEY: You heard a lot of those callers today, because I guess we have to separate gas and electricity, do we, in this discussion?
ANGUS TAYLOR: We do, but I understand people often have bills that have both of them on them. So, starting with electricity - I'm happy to come back to gas, John - look from today, effectively there is a price cap in place, and that applies to standing offers. That's the price you get if you haven't gone in and negotiated a better price. They're quite substantial reductions. They're up to $660 in New South Wales on the standing offers, similar amount in south-eastern Queensland, and much bigger amount for a typical bill for small businesses. Now as I say, that applies to people who haven't had the time to ring around. But we strongly encourage people to pick up the phone, make the call, and ask for a better deal. You will get a better deal if you ask for it. Shopping around is hugely important, and actually is made easier from today because the discounts from today are all versus the same benchmark. You can't get confused by lots of people giving you lots of different discounts that all mean different-price bills. From today, it's all versus the one reference price. So it's very, very simple to ring around and get the best possible price.
JOHN STANLEY: Because the argument before was, well, 10 per cent, 20 per cent off what? You don't know. So now we know what the standard- the cap price is. We know what it is, but is it possible that because the DMO as they call it, the standard price is coming down, that the discounts will not be as big?
ANGUS TAYLOR: Well, the ultimate question is what's the final price you get. And no, we don't- we don't expect that the final price you get when you ring around will be higher, in fact it should be lower. So yes, someone might have had an escalated standing offer which allowed them to offer you a 20 per cent discount, but that's versus a very, very high price. And this is the whole problem we had. You could ring around and someone would say, I'm giving you a 25 per cent discount. And in fact, it would be a far worse price than another company that was offering you a 10 per cent discount. So everyone was getting confused. What you get from today is the same reference price for every company that offers you a discount. And it means if someone's offering you 15 per cent, it'll be better than someone offering you 10 per cent. That's the important point.
JOHN STANLEY: You mentioned earlier small business. So there'd be small business people, and I'll say in fairness, some of those people who run small business they work 16, you know, or more hours a day just to keep the place going. But they're people- they haven't gone and talked to their retailer about the energy costs and whether their bills could be cheaper.
ANGUS TAYLOR: Exactly. So you know I've been into gyms, and dry cleaners who are big energy users. They use a lot of energy all year round, and from time to time, quite often I come across businesses that haven't made the call and it's understandable. When you're in a small business, you work extremely hard, you're very busy and the last thing you feel like doing is getting out a spreadsheet and comparing all the offers ringing around. It's hard work, it takes a lot of time, and you're very busy already. So we do see a lot of small businesses still on standing offers. They, like households, will see a reduced price cap on those standing offers from today, but they will also have a much simpler pathway and much simpler means of ringing around to the companies and getting the best possible offer because as I say, everything is referenced versus the one price. It's made a lot simpler than it has been in the past.
JOHN STANLEY: Yeah. I know you're not taking calls. What I can do, if I just get a comment from one of our listeners who's typical and then she can- you can just respond to it if I can.
ANGUS TAYLOR: Yeah, sure.
JOHN STANLEY: Eileen, you're in Brisbane. Now, I know you- a lot of calls coming in on this. You've got a note saying your electricity is going up from today, is that right?
CALLER EILEEN: Yes.
JOHN STANLEY: It's electricity, not your gas?
CALLER EILEEN: No, electricity from Origin. And I got the letter, oh, about three weeks ago and saying as from 1 July, my- and I can't remember how much it's going up, but I've got such a shock I cried. I'm 83 years old, darling…
JOHN STANLEY: And it's significant amount, is it, that you can't pay, you say?
CALLER EILEEN: Well if it keeps going up, darling, I've just got to cut back on something else.
JOHN STANLEY: Alright. Can we just get your details and we might just find, if you can possibly give us the details- but Minister, is it possible that Eileen's in that situation where she was on a fairly substantial discount that they're no longer going to offer or they're trimming the discount?
ANGUS TAYLOR: No. So what does happen is companies flip you from 1 July from a - what's called a market offer, which is you've rung around, you've got the best possible offer, they'll flip you up onto the standing offer automatically. Now what you've got to do to avoid that is ring around. This is why- make the call is so important, and happy to have a look at Eileen's case.
JOHN STANLEY: Can you work on that? We have the detail.
ANGUS TAYLOR: Happy to do that. The crucial thing here is to ring around and you will get the discounts. And as I say, from 1 July, from today, doing that, ringing around is much, much simpler than it was because every discount is versus the same reference price.
JOHN STANLEY: You can understand though, someone like Eileen they'll be 80- people in their eighties like Eileen that are not listening to this show who haven't heard this conversation, who are thinking, well I've got no choice here - they won't know what to do. So, I noticed part of your announcement here, you've got an advisory service being set up, is that going to help people like Eileen? To give them the information they need.
ANGUS TAYLOR: It is, and you might remember just before the election we ran a campaign called Make the Call, which is just pick up the phone, make the call. The great bit of feedback we got from a lot of people about this - oh, it's confusing; it takes too much time; all the discounts - they're not apples with apples, they're apples with oranges when you try to compare them. And that's why we've made this a much simpler process of having a single reference price. So when you do make the call - and it is, you know it takes time let's face it, it always takes time to get the best possible price - you know that you're going to be able to compare apples with apples now. Now, we were also cautious of the fact that a lot of our most vulnerable users and small businesses are on standing offers, don't actually ring around, and that's why we've put a price cap on the standing offers. But if you're being pushed from a market offer on to a standing offer, it's really crucial that you ring around and get the best possible price.
JOHN STANLEY: So someone like Eileen, she should be able to get a better price and she should not be paying more for her power today than she was last month?
ANGUS TAYLOR: Well I don't know Eileen's individual circumstances, we'll look at them. But it's absolutely true that if you're being bumped from a market offer, where you've rung around to a standing offer, you can get a better price by ringing around again. You have to do that each time the bill comes up. They have to warn you by the way that your bills coming up. They never used to have to do that, they'd just bump you up. Now they have to warn you. And that's why she got that letter. But the crucial thing for her now is to ring around. We're happy to have a look at her case for her.
JOHN STANLEY: Yeah, okay. Because look I've got a board full of calls here and I'm just wondering whether they might all be saying the same thing. And you'd appreciate politically, I've got your statement here: lower bills today, or from today for electricity customers. You were arguing the case for lower power during the election. They're not going to be happy if suddenly their power price is going up.
ANGUS TAYLOR: Well the point I'd make to them is if they're on a market offer it's crucial they ring around. We've made it much simpler to do that. We've also, this is a change we put through recently, we've set up this system where they have to warn their customers when they're bumping them from a market offer to a standing offer - they have to tell them. So that gives you a warning it's time to ring around and get the best possible price. As I say, if you were on a standing offer the prices will come down. There's no question about that. You're right.
JOHN STANLEY: But if you're on a discount and they're bumping you up to a standard offer, then you're going to be paying more. But from- based on what you're saying, no one should be on a standing offer, should they?
ANGUS TAYLOR: Well, we're trying to get everyone off them and the campaign we ran before the election, we got a lot of people moving off standing offers but, you know, there's all sorts of reasons. People don't get round to ringing around. In the past, they weren't warned so they got bumped up and they didn't even know it was happening until they got their first bill - we've changed that. But it is crucial, you know, ring around to get the best possible price you can, that's the way you avoid them bumping your price up as Eileen said.
JOHN STANLEY: I suspect this is just kicking off. We'll deal with Eileen's case and I suspect a lot of people are going to be going and looking at their bills, I know I am, to see where they stand over the next few days. So that's electricity, what about gas? You've heard those calls this morning, what can we do about that?
ANGUS TAYLOR: Yeah. No. And this is - look, I've been very focused and the government's been very focused on electricity because this is where we've seen the biggest increases in the last couple of years and it's why we've made all the reforms we have now. Now we are seeing now that the companies pushing up often - not necessarily the same companies but they can be the same - pushing up their gas prices and this is a real focus for us. Now, we've brought in a series of reforms to reduce the wholesale price and put downward pressure on the wholesale price; we're seeing now increases in retail prices and we're conscious of this. We know that we need now to focus our attention on making sure people are getting a fair deal for gas as well as electricity. Look, the one thing I've got to tell you John that can make the biggest difference here is state governments have put bans on gas, particularly in Victoria and this is really crucial for the Southern states including New South Wales - it has an impact there. We've got to get those bans off, they've got to go. If we're going to have enough gas to get the price down we've got to get rid of those state based bans.
JOHN STANLEY: I mean you can't do much about Queensland and Victoria, what about New South Wales?
ANGUS TAYLOR: Well, New South Wales. Look, at the end of the day, New South Wales' price of gas is heavily influenced by gas coming out in Victoria and we've got gas shortages emerging in Victoria because the state government there has put a ban on it. I mean that's the truth of it is that gas has come from Bass Strait to Victoria, that's running down and the gas, and the government has banned onshore development and that's got a change.
JOHN STANLEY: So you're working on gas but ultimately you acknowledge these prices are going up, there's not much you can do about that at the moment.
ANGUS TAYLOR: We are seeing them and it depends on the customer and every customer is different. But we are seeing some customers seeing gas increases. We're conscious of this, I'm very aware of it. The focus has been on electricity. We know we now need to spend some real attention on getting a fair deal for gas.
JOHN STANLEY: Okay. Just a couple of quick ones if I can. If there was an algorithm looking at phrases used on this program it would come up with coal-fired power station near the top. So on behalf of a lot of the listeners here and Ray, coal-fired power station, where are we up to with that and getting something happening there?
ANGUS TAYLOR: Yeah. Well look, the first thing I'd say about this is that the thing that is going to keep power prices down in the short term is getting enough coal and gas to our generators to drive the price down, enough supply into the market and competition into the market because a new power station takes years to develop and build. That being said, we're working our way through 13 projects, two of them are coal, a number are gas, also hydro. We are moving as quickly as we possibly can on getting those projects coming to fruition. We're not handing over a blank cheque, you know, governments have done that in the past and that's bad practice, it's bad for taxpayers. That being said, we've got one in particular we're working on right now in Queensland, a coal-fired power station up there and the proponents Shine Energy are working hard with us to get that to a point where we can actually make a final decision on it.
JOHN STANLEY: Do you accept the story in The Telegraph today because it's come from fairly authoritative people like Gordian Fulde, the Emergency Department Specialist who's very credible, talking about people who are coming in there with hypothermia because they can't turn on their heaters, they can't afford.
ANGUS TAYLOR: Yeah. There have been some real hardship stories we have seen in the energy sector and I've got to tell you in electricity. You know, every time I see one of those I go to the electricity company and I say what's going on here, very happy to take cases again that people see. This is- this shouldn't be happening, you are absolutely right, John. It is completely inappropriate in a country like ours that this is happening.
JOHN STANLEY: Alright. Look, I'll finish up. I've got a board full of calls and we've got a lot of emails here. Can I just say on this because this is a typical email?
ANGUS TAYLOR: Yep.
JOHN STANLEY: Government said power prices will be lower if we voted for them. It's quite clear they lied, there's nothing, Mr Morrison, we won't forget. Now, that's a reaction. Now, I know, you know, you've given us your explanation there. This is politically going to be dynamite for you if that - if that comes through and that attitude is reflected.
ANGUS TAYLOR: Well, you know, as I say, every person's case is different but - and I've tried to explain the main cases that you will see - if they're on standing offers, they will see them come down directly. If they're currently on the market offer and they're being bumped up, then they've got to make the call- make that call and ring around, you will see a significant reduction. As I say, it's a much easier process than it was.
JOHN STANLEY: Alright, we'll learn more as the week goes on. I appreciate your time this morning. Thank you.
ANGUS TAYLOR: Good on you, John. Thank you.
JOHN STANLEY: That's Angus Taylor, the Energy Minister and Minister for Emissions Reduction.