10 October 2019
LEON BYNER: I want to talk to the Energy Minister, who's come on today, Angus Taylor, because he's really in the box seat right now with regards to electricity prices, gas prices, what you pay. And I want to start off by playing you an excerpt, and I said this to a caller yesterday who rang in - it was an exchange between a senator - that is a Federal Senator - and Alan Finkel, Australia's Chief Scientist. Here it is:
UNIDENTIFIED: In Australia we emit less than 1.3 per cent of the world's carbon emissions?
ALAN FINKEL: About that.
UNIDENTIFIED: If we reduce the world's carbon emissions by 1.3 per cent, what impact would that have on the changing climate of the world?
ALAN FINKEL: Virtually nothing.
[End of excerpt]
LEON BYNER: Alright. That's completely in context. Now, my playing that doesn't imply that we shouldn't do anything, because the argument would be if we're accepting this, we need to do our bit. But we don't need to virtually bring the country to a halt, because in so doing, we're going to hurt ourselves more than help anybody. But we have to do our bit. Energy Minister Angus Taylor, you are very aware of that reality from the Chief Scientist, and I am absolutely sure that you've had conversations with him. Where do we stand now with this business of emissions and getting them down?
ANGUS TAYLOR: Well I think Alan put it well, Leon, I think he's exactly right. We're just over one per cent of global emissions. That means our actions on our own achieve very little which is why we've got to be part of a coordinated global action. So we've signed an international agreement. We've committed under that to reduce our emissions in 2030 by 26 per cent, which is high, given- a large reduction, it's a strong target. We've got a very clear plan as to how we're going to get there down to the last tonne. We've fully funded that through our $3.5 billion Climate Solutions Package. And we are doing our bit, and that's the really important bit. I think you've got it exactly right in your intro. We need to do our bit. We've got to recognise, we're only a relatively small part of the total, but doing our bit is our moral obligation.
LEON BYNER: All right. Now despite that being acknowledged, there are those of the Green or further left who say, nope, that's not enough. What do you say?
ANGUS TAYLOR: Well, we're just not going to trash the economy by doing far more than our fair share. The truth is that there is a trade-off here. If you want to pursue very aggressive targets, you know, a 50 per cent emission reduction target or higher, and there's some calling now for net zero by 2025, Labor at the last election had a 45 per cent target by 2030 - it will cost jobs, it will cost income, it will cost to the economy and to crucial sectors like agriculture, mining, manufacturing, and it will cost to every household and small business because they'll have to pay more for their energy, Leon. So there is a trade-off here. If you want to go for more aggressive targets, do more than is required than is our fair share, then what you will be doing is trashing sectors, regions, and of course ultimately consumers will have to pay more. We're not prepared to do that. We've got to get the balance right here. We've got to be sensible. We've got to be rational, and we've got to be clear-eyed about this issue. It needs to be dealt with, but it needs to be dealt with in a sensible, balanced way.
LEON BYNER: Now, you in the Federal Government are talking about a big stick and having more interventional regulation, and there are those who are in the economics position who say, well, all that's going to do is force prices up. But Minister, don't you think it's a great irony that we've pursued these renewable targets - and SA has probably done it more so with vigour than anybody else in Australia - and yet the profits of the three biggest energy companies in the last few years, when you total them up, have increased by $1 billion dollars. What is that telling you?
ANGUS TAYLOR: Well in fact, more than $1 billion - in three years, they went from $3 billion to $5 billion. So it tells you a lot. It tells you that there has been profiteering, that wholesale prices were pushed up, and retail prices to consumers were pushed up by the big energy companies, and they took a lot of it as profit. There's no question about that. That's why the ACCC said this is unacceptable and unsustainable, and we're implementing a whole series of recommendations they made. We put price caps on standing offers, as you know well, we've talked about that in the past. We're banning confusing discounting practices, those sneaky late payments. We're pushing more supply into the marketplace to bring wholesale prices down. All of these are crucial initiatives. We're seeing early good progress. We know there's more work to do. I know you've still got listeners who want to see prices come down further and haven't seen those benefits - they'll be many who have, but some who haven't - there's more work to do here. But part of this is holding the big energy companies to account and that's what this legislation, this big stick legislation does. Of course the big energy companies hate this. Of course they hate it. But it wouldn't be necessary if the energy companies did the right thing.
LEON BYNER: Now yesterday, and this is an interesting anomaly because you've got the banks recently, you had the Reserve Bank drop the interest rates by 0.25, most of them haven't passed most of it on or all of it on, only some partly. And now you've got a situation where the energy regulator has basically said - and it's a draft report - but in theory, $63 less for consumers like me and you and then $280 for businesses. Now they are input costs that go to the retailers. We have no guarantees, Minister that any or all of that is going to get passed on to consumers.
ANGUS TAYLOR: These reforms will help with that. The price cap we've put in place is set in a way that if costs come down so too does the price cap. So that's the first point I'd make. The second point is this legislation that we've taken to the Parliament will give powers to deal with a situation where cost savings aren't passed on. Now, if those cost savings are sustained and substantial then they must be passed on - that's how the legislation works. So we are making this very clear in the legislation, the energy companies have to do the right thing. Look, we don't want to see any intervention if we don't have to make it. The point I make to the energy companies is do the right thing and we won't need to intervene, it's very, very simple. The right thing is to make sure those cost savings are passed on to consumers.
LEON BYNER: Minister, the other conundrum in all this is that we have a situation where energy experts are warning us look, hold on to your hats it's going to be a bumpy night - as the late Bette Davis used to say - because we will likely have shortages of electricity because of maintenance issues with some of these coal-fired power stations that are not designed to be switched on and off quickly.
ANGUS TAYLOR: Yes.
LEON BYNER: They need more maintenance, anyway, they fall out into disrepair and so they're off-line. Where do you stand on this? What are we going to do as a contingent to ensure - because you know we all need electricity, businesses, look, for jobs, for smelters, for manufacturers, for retailers, food providers. What are you going to do on this, on this imminent warning? Because you know what's going to happen, the people will blame governments for this.
ANGUS TAYLOR: Well yeah, look I hear you loud and clear, and there's, look, we need to make sure there's enough reliable supply in the market to keep the lights on so that when you flick the switch you know the lights are going to come on, but also to put downward pressure on prices. It's why I said at this conference yesterday we need a clear plan if a coal-fired power station is going out of the market there needs to be a clear plan for like-for-like replacement or extension of life.
LEON BYNER: Have we got that now?
ANGUS TAYLOR: Well we didn't have that with Northern in South Australia or Hazelwood in Victoria in the past. The next one that's scheduled to close is Liddell in New South Wales. For the first time, three years ahead of planned closure date we've put together a task force and I've said very clearly to AGL, who's the owner, you either come up with a like for like replacement plan or we need life extension. We're working closely with the New South Wales Government in that case. But we can't see a repeat of what we saw in South Australia and Victoria. Sadly that will, if we were to see a repeat of that, it would have implications for South Australia so this really matters Leon. I've been very clear about this. You can't have a situation where coal-fired power stations or either gas-fired power stations are closing and there is no plan for what you do after the closure. That's just crazy stuff and that's the situation we were in that we won't see repeated in the future.
LEON BYNER: What's your message to South Australians if we have a situation when there are load sheds or blackouts because of shortages?
ANGUS TAYLOR: The first point I'd make is that I know the South Australian Government, working closely with us, is doing everything in their power to try to make sure that doesn't happen.
LEON BYNER: What are they doing to make sure it doesn't happen?
ANGUS TAYLOR: They've invested in generation, and batteries, and they're working with us very closely to get new supply into the market. We are dealing with the legacy of the 50 per cent target that was set by the previous Labor government, forcing out older generators without a plan for replacement. We're dealing with that legacy and the truth is that has raised the risks and it has put South Australia into a difficult situation. As I say, we're working as closely and as quickly as we can with a very collaborative South Australian Government to address the situation. I am certainly hopeful that we'll get through this summer without an event. But there's risk, and that's the reality of the situation that that previous Labor government put us in.
LEON BYNER: As Energy Minister for our country, what's your take on the Extinction Rebellion activism that's going on particularly in the eastern seaboard?
ANGUS TAYLOR: I'd make a couple of observations about it - one is hysteria doesn't solve the problem. I think your introduction was a very good one where we are a little over 1 per cent of global emissions. We've got to do our bit, we've got to be part of a coordinated global action. Of course, you know, we've got to be sensible and hard-headed about it to the extent that those activists are actually breaking the law, and they should be held to account Leon, they should be held to account. That's very clear. But what I'd say in all of this is we've got a very clear plan, we've got clear targets. We're not where the Labor Party is which is all over the shop right now. They can't make up their minds where they stand on this.
LEON BYNER: It's being argued by a lot of people out there, of goodwill, who say look until we can get a bipartisan agreement on energy policy we're not going to get the investment climate we need for people to come in and build power stations.
ANGUS TAYLOR: Well I think you can still get investment, but will bipartisanship help with all of this? Absolutely. We went to an election with a clear policy. Labor went to an election with a very different one. Labor is now in chaos about this but Joel Fitzgibbon has come out, he's flipped and he's arguing that Labor should come to our policy now. I agree with him on this. I think it would be good for everyone to agree on this and to get on with it. But right now we're seeing Labor in complete chaos over this issue.
LEON BYNER: All right. Angus Taylor, thank you for joining us.