PAUL MURRAY:
Scott Morrison, good evening mate. Now you may have heard my earlier spray this evening so I will be clear here…
TREASURER:
No I missed it Paul but I am looking forward to the reprise.
MURRAY:
Yes, don’t worry. Basically, here’s the thing. An expectation began to be set that something was going to be done about power bills. You know the number of people who complain in your electorate, who stop you in Brisbane, who stop you in Adelaide, who write you emails from WA. What can you say to people when nothing will happen to those power bills until 2020 maybe?
TREASURER:
That’s not true, that’s what I’ll say. Because Paul, you’re looking at only one element which is what we announced today, which is the National Energy Guarantee, and already people are getting 20 per cent discounts on their bills by renegotiating their agreements with the retailers as a result of the things we’ve already done with the retailers. Already we’re seeing changes in the wholesale price of gas as a result of what we’ve done with the gas companies to secure domestic gas resources for domestic use. We’ve already acted on the energy regulations which has been a key part of our plan, the limited merits review as it’s known, which was the free kick that was given to the poles and wires companies that in the future won’t be able to bid up the price and gold plate their infrastructure, that’s already happened. What we’ve announced today is the National Energy Guarantee which provides certainty for investment, gets rid of all the subsidies and I’m often watch the program as you know mate, and the number of times I’ve heard it said we’ve going to get rid of those subsidies – why does investment certainty mean giving certainty of subsidies to windmills? And we’re not going to do that. Subsidies done, gone. And they are.
MURRAY:
I’m going to get to the subsidies stuff in a second. About the power price thing, should the onus be on the consumer though, it’s fine if you’re in a major capital city, it’s fine if you’re a forceful person like yourself or Bronwyn or anyone on this show, let alone if you’re someone in regional Australia who has only got two power companies, or out of regional Australia that’s got one.
TREASURER:
I’m not saying that’s the only thing either Paul, I’ve talked about gas. I’ve talked about poles and wires, I’ve talked about retail deals, I’ve talked about what’s done under the National Energy Guarantee. This is a constant moving agenda and we’re constantly just working through the issues. I mean, there’s another big agenda which we continue to work through and the ACCC has been tasked to do this, not just in the electricity transmission sector but also in gas pipelines and there’s further work to be done there. This is a comprehensive agenda. The bit we’ve announced today, as John Pierce announced today, his analysis of that says around $115 cheaper. But you’ve also got to put it against what the alternative is, and the alternative is $66 billion of unnecessary subsidies at the altar of climate ideology by the Labor Party. So, it’s a clear choice there. You want to have the 45 per cent emissions reduction target, well, you’ll pay under what Labor wants to do $66 billion in subsidies that are unnecessary to meet environmental targets.
MURRAY:
So when you talk about the ending of subsidies, can you help clear this up for me, everyone who currently had a contract, they still get the subsidies. From today until 2020, if I’m a new company that comes to you saying I want to build a wind farm, can I get a subsidy between now and 2020, or does it end in 2020?
TREASURER:
The RET ends in 2020 and as Josh Frydenberg said today, by the end of this year, it will be pretty much subscribed. It will have achieved its goal and that will run until 2020, then will run down from then and the forward price on those certificates falls away. We’re not getting rid of the RET, we never said we were getting rid of the RET. That was something that was confirmed when I sat in cabinet with Tony Abbott and that RET was downgraded in terms of the level we were able to get it to. We were unable to get it down any further. For that to change, the Parliament would have to approve that and we know that can’t happen. So we had to come up with something that dealt with the post RET period and in the post RET period there are no more subsidies.
MURRAY:
When so much of this is going to be done through regulation, when will we start to see detail about how regulation works, is it something that is a million little decisions that basically will be away from public consumption, or are you going to try and pull it all together so we can see how you’re going to be able to achieve this through regulation in the same way that you would be able to have one giant debate about legislation?
TREASURER:
The energy security board which was the group that was set up to take what Finkel had developed, and that’s what’s come out the other end of this process which is this National Energy Guarantee. Now, Importantly, what they’re saying, is the way that this should be implemented is through the national energy laws, now that is done through a COAG process and that means once that is changed, it effectively inoculates against, if there was every, god forbid, to be a Bill Shorten Government, if they wanted to go in and whack in a 45 per cent emissions reduction target, and on top of that a 50 per cent RET, particularly on the latter, they would have to go and change all those rules and that would be unlikely to be able to be achieved. So that’s why that is the right way to go. That’s why Innes Willox from the Australian Industry Group has said today this is a very good way to pursue this change to ensure that that certainty is created. Once you have the scheme established, through that COAG process, it basically works like this, if you’re a retailer, you have to have a portfolio of energy that you contracted through the system, and you’re already contracting stacks of energy every single day, it’s your business as usual. And you’re going to do that to ensure it has a reliability profile and it has an emissions profile. That means, take a company like Delta Energy, Delta Energy bought the Vales Point coal-fired power station, when everyone else said that you couldn’t keep it open, it was all done. They went and bought it, and they’re operating. Now, they’re also, I understand, involved in solar. So, when they go and sell as Delta as a retailer, they’re actually meeting both objectives. The retailer will look at that and they’ll contract with them. And that’s the beauty of this scheme, the retailers will find the cheapest way to deliver on these objectives which Australians have said they want, they don’t want to pay more for it, but they want the environmental objectives to be achieved. That’s what my electorate is telling me, they want both. And they don’t want to have to pay more for it, and I don’t see why they should have to. That’s why the subsidies should go.
MURRAY:
Treasurer Scott Morrison, Scomo, short and sweet. Thanks for the chat mate, appreciate it.
TREASURER:
Thanks a lot Paul.