Interview on Sky News Live with Kieran Gilbert
Topics: ACCC draft report on electricity market; Latest Newspoll
Kieran Gilbert: Minister thanks so much for your time, this is a very blunt report from the ACCC, really no surprise to I think consumers and businesses that there is an affordability problem, they’ve been seeing it on their bills, but this finding from Rod Sims is that their under unacceptable pressure and this is the context within which your coming up with your new energy policy. It’s not easy?
Simon Birmingham: And Kieran this is why the Turnbull Government’s been taking a series of different steps in relation to energy policy over quite a period of time now. Historically energy policy has been driven, owned and the responsibility of state and territory governments. But the crisis had become profound enough that we recognise the need for national leadership, we’ve stepped in to provide it, the ACCC report demonstrates that the biggest contributor over the last decade to energy price rises are network costs, that’s why there is legislation before the Senate, the first order of business for the week, and to try and deal with network markets. If it wasn’t for the Labor party’s faffing around and sending it off to Senate Committee’s and so on, that legislation would have already been passed. The second biggest contributor are retail costs, again it’s why Malcolm Turnbull took the leadership in bringing the retailers in, extracting commitments from them in terms of their engagement with their customers. The third largest contributor then being generation costs which of course we continue to work on and are providing some long-term answers to through the likes of the Snowy 2.0 scheme.
Kieran Gilbert: [Talks over] But it also, the next component is green costs, which environmental subsidies and so on, which the Newspoll today shows understandably I guess nearly 60% of people don’t want to pay a dollar more on their bills to subsidise cleaner power now.
Simon Birmingham: Well the Newspoll shows a bit of a paradox there, that people want to see renewable energy’s but they’re not willing to make a contribution towards them. Now the good news in that regard, as Josh Frydenberg highlighted recently, is that the cost of renewable energy generation has been coming down markedly which of course starts to make it more competitive with some of those traditional energy generation sources.
Kieran Gilbert: Does it start to question the need for subsidies then?
Simon Birmingham: That creates a question for need for subsidies, the renewable energy target itself is set through to 2020, and now beyond that, it then phases out, what happens for the future is something the Government is looking very closely at as to how we sensibly meet and honour our international emissions reductions targets, but do so firstly guaranteeing generation reliability and certainty in the system so that we never again see repeats of what happened in my home state with total black outs with brown outs and phase outs.
Kieran Gilbert: And affordability?
Simon Birmingham: Affordability comes through front and centre.
Kieran Gilbert: [Talk over] So how soon will we get that affordability and reliability approach that we are hearing, it’s not going to be the clean energy target, what is it going to be and when we will know?
Simon Birmingham: Well Kieran, the ACCC report makes it very clear there are no silver bullets, so we are already implementing an affordability approach, already implementing it because we’re changing the way the network market rules operate to do deal with the biggest cost contributor. We’ve changed the way the retailers engage with their customers to deal with the second largest, we’re investing in new sources of generation that will be able to come in at peak price times for generation and offer a lower price bid in terms of dispatchable energy guaranteeing that we have cheaper sources of energy.
Kieran Gilbert: The Industry you know, has made it clear they need certainly they need parameters for investment?
Simon Birmingham: Sure.
Kieran Gilbert: So there has got to be something in place as a signal to the market of where to invest?
Simon Birmingham: And so that fiftieth recommendation of the Finkel report and the response to that and how it is we meet that emissions framework so that people can invest with certainty then will absolutely be also finalised very very soon by the Government to provide that comprehensive package although we won’t stop from there, this ACCC work will continue, there will be a final report which may well provide further recommendations across network, or retail, or generation, or environmental policy.
Kieran Gilbert: So whatever you will announce will have the scope to add further recommendations from the competition watchdog?
Simon Birmingham: Well this as I say, the ACCC report says there is not a single bullet to this and if the Labor party want to come along and pretend that a clean energy target is a silver bullet, well that is completely misleading and contrary of course to what the ACCC has said about environmental policy.
Kieran Gilbert: The problem though for industry is that, and as you have just alluded to it there, is that Labor is not going to accept anything that doesn’t have a clean energy target, they’ve compromised that far, they’ve gone further than they wanted to, they wanted an emissions intensity scheme, they’ve said ok no, we will cop this clean energy target.
Simon Birmingham: Well Labor should put ideology to one side on this.
Kieran Gilbert: They say they already have.
Simon Birmingham: Well then they should keep it to one side and they should keep an open mind to see what polices come forward, that can give the reliability the certainty and contribute to affordability in investment that our energy markets need. They shouldn’t think there is one magic solution there, there may well be other, better approaches and that is certainly what the Turnbull Government is determined to do, implement the best possible approach to dealing with these issues.
Kieran Gilbert: Finally, another Parliament, Parliamentary week and another Newspoll, the twenty-first poll, that the Government has trailed in. Do you subscribe to the view that Tony Abbott intervention has helped keep a lid on any improvement here, that every time he makes a contribution like he did in London that prevents any sort of recovery?
Simon Birmingham: I think Alan Tudge put it pretty well with your colleague Patricia Karvelas last night, that of course any perception that the Government is not focused on the things that the public care about is an unhelpful perception, now I can certainly reassure you, that aside from having to answer your questions and so on, it doesn’t distract my work or Malcolm Turnbull’s work or the rest of the Cabinet’s work, we’re all getting on with these important issues like dealing with energy prices.
Kieran Gilbert: Is Tony Abbott doing that on purpose or intentionally do you think?
Simon Birmingham: Well that’s a question for him.
Kieran Gilbert: But it is having that impact of dampening any sort of recovery that’s your view, is that the view within Cabinet?
Simon Birmingham: Look, I don’t think that any type of perception of distraction is helpful, I think Alan Tudge put that well last night. Beyond that, we’re going to keep focused on the energy price issues that really matter to Australian households, just as we’re doing delivering them relief in their child care bills, just as we’ve delivered them relief in terms of private health insurance and these are the things that the punters care about that we’ll be focused on.
Kieran Gilbert: Education Minister, Simon Birmingham as always appreciate your time, thanks.
Simon Birmingham: Thanks Kieran.