2 July 2019
LAURA JAYES: Live now at the studio, the Energy Minister Angus Taylor, he joins me now. Let's talk about these July 1 changes. You promised big in terms of cheaper energy prices. How big?
ANGUS TAYLOR: Well it's a significant reduction for Australians who are often the most vulnerable. The default market offer, essentially a price cap on the default price you get if you don't have time to get in and negotiate a price. And that will be a reduction of up to $630 in New South Wales and Southeast Queensland, and other similar sort of reductions in other states. That applies if you haven't got time, and a lot of small business people and households - particularly older Australians - aren't able to get on the phone for one reason or another and to negotiate a better price… so the price will be capped significantly lower than- the standing offers will be significantly lower than last year. But there's another change which is going to place, Laura, which is equally important, which is when you do call - and we strongly encourage people to call up and get a better price - all prices will be benchmarked against the same reference price. So if some- if a company offers you 25 per cent off and another company offers you 15 per cent off, you know 25 per cent off is a better price. You don't have to sit there with a spreadsheet and try and work it out yourself. It's very simple. And that reference price is an important part of the reforms going into place today. It does mean that they'll never have been a better time to make the call, to call up and get a better price from your energy provider.
LAURA JAYES: So all the hustlers and hagglers out there, they should hit the phones and get on to their energy companies.
ANGUS TAYLOR: Hit the phones and each- people should understand that some energy companies do choose to try and bump you back up on to what's called the default price or the standing offer if you don't ring, now they’ve got to warn you, you get a letter. But it's very, very important people get on the phone, call up, call a competitor, call your existing company, ask for a better price, you will get one.
LAURA JAYES: So you say $630 in New South Wales - just as an example - would that be an average, or would that be at the higher end?
ANGUS TAYLOR: No. That's- it's up to $630 on the standing offers. But as I say, there's significant discounts up for grabs if you ring up and call around. As I say, it's an easier time to do it than ever. We've seen - as a result of the government's actions - more people ringing, calling around to get a better price than ever before in the last twelve months.
LAURA JAYES: On average, you think it might be about $200?
ANGUS TAYLOR: Well it just depends on the individual situation. Everyone's- this is a market, so I'm not going to- I'm not going to say what each individual situation is, but it's up to $630 in Southeast Queensland and New South Wales for people on those standing offers, and they are the most vulnerable. You know, typically we see many older people, unemployed people in a position where for one reason or another, they're on the default offer - the standing offer - so are many small businesses. And in fact, this is an interesting part of it, is small business people are so busy, Laura, they don't have time in many cases to ring up. So the default offer they'll get, that is capped now. It's a better price, for small businesses up to $2000 reduction.
LAURA JAYES: Okay. Families and small business are paying still up to thousands of dollars per quarter on their electricity bills, gas prices are getting more expensive and I ask you in the context of Centre Alliance really pushing for really a gas price cap in many ways. Can you explain why we send so much of our gas offshore and we don't quarantine it for domestic use, when that could actually be a way to bring prices down?
ANGUS TAYLOR: Well that's only in Queensland, it's certainly not in New South Wales and Victoria what you're describing. New South Wales and Victoria are the big domestic household gas-using states, and the fundamental problem we’ve got in New South Wales and Victoria is a shortage of gas supply …
LAURA JAYES: Moratorium on fracking.
ANGUS TAYLOR: Victoria has a moratorium. Victoria in particular doesn't have enough gas coming out of Bass Strait anymore to supply their market. So they're having to import gas all the way down from Queensland to meet their needs. Now, the result is people are having to pay more. The simple answer to that is raise- lift the moratorium in Victoria, make sure there's enough supply.
LAURA JAYES: So don't quarantine it, you say produce more?
ANGUS TAYLOR: Yeah. Produce, the number one solution to this problem in the south which is where the problem is really biting because households use a lot of gas in winter in particular in the southern states.
LAURA JAYES: But you don't have any power over that, this is a state jurisdiction …
ANGUS TAYLOR: Well, the point is that the Victorian government has consistently left this moratorium in place. I've been arguing since 2011, Laura, before I went into the Parliament I did a review with Peter Reith arguing that moratorium needed to be lifted or we would end up in a situation.
LAURA JAYES: And here we are, and you've still got no power over it.
ANGUS TAYLOR: Here we are. Well, the states need to move. I mean the Victorian government is running an insane regime on gas, they are blocking the supply of gas and they're not taking responsibility for what's happening to the price.
LAURA JAYES: And there's a report out this morning, Angus Taylor, that they might even- the states might not even reach their own individual renewable energy and emission reductions target. What do you make of that?
ANGUS TAYLOR: Well, I mean Victoria has lost the plot on energy. It's got a moratorium on gas and it means that everyone in Victoria is having to pay more for their gas. They've set very, very high renewable energy targets without worrying about how to firm it up. I mean, when the sun doesn't shine and the wind doesn't blow you need to have a solution. Victoria doesn't have that solution.
LAURA JAYES: Well, let me ask you. Where are you on nuclear?
ANGUS TAYLOR: Well, that's a completely different issue but just to finish off on Victoria, we have put in place the reliability obligation now which will mean that when the sun doesn't shine and the wind doesn't blow retailers have to have a solution to that problem, that means more firm and baseload power which raises the issue of where that's going to come from.
LAURA JAYES: It could be nuclear.
ANGUS TAYLOR: There's no time- there's no time in in the next few years where nuclear is going to solve that problem. I mean that's just not- it's a long term issue.
LAURA JAYES: Well, the New South Wales Treasurer has said that he doesn't want to see a referendum on whether the nuclear ban should be lifted but says the federal government, you guys, should be having a conversation about it. Would you be opposed to a Senate inquiry looking at the viability of that?
ANGUS TAYLOR: Well look, I've always said that the key issue here is the business case, the economic case. Is there a strong economic case for it, tradition… Well, I mean the question is, is there an economic case to do that. Now, that's what needs to be laid out, but be clear, Laura, this- you know, if we're going to solve this energy problem in the next couple of years, it's going to be much more immediate initiatives that are going to need to be in place like what we're doing today, on July 1, like the reliability obligation. Future energy sources and- we'll have a much longer-term timeline before they can have any impact. So I'm very focused on the short term solutions because that's what Australians want.
LAURA JAYES: Would it hurt to have a Senate inquiry?
ANGUS TAYLOR: Well, as I say, what has to be established here is the business case, the economic case.
LAURA JAYES: Could you do that through a Senate inquiry?
ANGUS TAYLOR: Well, I- look there's lots of ways of doing that. There's many possible ways for people to make that economic case and people are doing it. Well …
LAURA JAYES: But you could really get behind James McGrath and Keith Pitt here and I'm sure they'd love your support.
ANGUS TAYLOR: You're clearly championing this idea. But what I'm saying is there's many ways to establish the economic case. The fundamental issue though we face right now is getting more supply into the system, making sure the competitive regime is right, that the energy companies are doing the right thing by their customers, that's what's going to make the difference in the next couple of years.
LAURA JAYES: But you don't hate the idea of a Senate inquiry on nuclear?
ANGUS TAYLOR: You won't give up, will you? I mean look, as I said, I'm focused on getting these short to medium term problems solved.
LAURA JAYES: I don't think Keith Pitt or James McGrath will be taking much comfort from what you've said this morning. Angus Taylor, we'll speak to you soon.
ANGUS TAYLOR: Thanks for having me, Laura.