SABRA LANE:
Joining us now is the Federal Treasurer Scott Morrison. Good morning and welcome to the program.
TREASURER:
G'day, Sabra, and Merry Christmas.
LANE:
Thank you. You too. The ACCC has found some short-term improvements in the gas market but it still says it's not operating effectively and that prices are still too high. What guarantees can you offer to industrial users that you will deliver cheaper reasonable prices in 2019?
TREASURER:
Well we've already demonstrated that by what we've already achieved, what we said when we got together with the big gas companies earlier this year with the Prime Minister and Barnaby Joyce and Josh Frydenberg, we had a shortfall of gas for the next year and the year after and we've been able to turn that around into a surplus on the estimated demand. We've seen not only those prices fall from – as Rod said – from about $16 per gigajoule down to $8-$12 but we've also seen these large commercial, industrial users getting more offers as well – which they weren't getting – I'll give you an example. Up in Townsville, we had a refinery up there which wasn't going to have its gas contract extended beyond 31 December this year and as a result of our interventions there, we've been able to ensure that didn't happen and they got their gas. I'd like them to get it at an even better price than they've got it but at the same time, the Commonwealth has acted and the issue now is still an issue of supply, particularly in the southern states, and that's what the ACCC's highlighting. The gas that we need is under people's feet in New South Wales and in Victoria.
LANE:
We'll get to that in a moment but if demand for gas next year reaches the top-end of demand forecasts, given the graph on page 11 of that ACCC report, Australia could still be short 33 petajoules next year.
TREASURER:
I'm very confident in the conversations we've had with the gas providers that should that more extreme situation come about that that will also be met and that was the nature of the conversations we had. In terms of what's being contracted now, that has been lifted. There are more offers out there in the marketplace and there is a flexibility that is now being built in by this process which will ensure that we have the flexibility to respond to higher demand scenarios. We said we'd take action, we did take action, in the space of literally months we've seen the price fall from $16 down to as low as $8 and for smaller C&I users, they've also seen a big change as well.
LANE:
They have but not by the same amount.
TREASURER:
Well, actually, the fall that they've had has also been significant from around $18 down to $11, $18-$19, but they were facing even higher prices. So there's no doubt that the ACCC report shows that the Prime Minister's action to engage the gas companies has worked. Now, there is further work that has to be done but that largely rests with getting the gas out from under people's feet. That is not something that is in the control of the Commonwealth Government, that's obviously in the domain of state governments, and as Rod shows in his report people in the southern states – particularly in Victoria – are paying $2 at least more because of the transport costs and we still have a shortage in the southern states on what is available in the southern states. It has to be taken down from Queensland.
LANE:
But even as you point out, the Commonwealth can't do anything in this territory – given those state and territories so far have ignored your demands to lift moratoriums. You're powerless, aren't you, to do anything to lift those bans?
TREASURER:
I think we've already demonstrated through the actions we've already taken that we've had quite a significant impact, but this is always going to be something that requires responses from other levels of government. By taking the action we can take, we've done the things that we can do and we will continue to do those – on the pipelines, for example, there was also a strong endorsement of the competition reforms we've put into place for gas pipelines – that was endorsed by the ACCC and they believe that that will continue to have a positive impact not only next year but the years that follow and they've encouraged us to keep on going with those reforms which were secured – I should stress – also through a COAG process getting the states and territories on board as well by Josh Frydenberg.
LANE:
The Prime Minister says the Government will focus on putting more money into people's pockets next year, how will you deliver that promise next year?
TREASURER:
Just staying on electricity for a start, the other discussion we had this year was with the electricity retailers. Now, we already know that as a result of that direct intervention, some 100,000 households have already moved off standard offers and they've had discounts of up to around 20 per cent and more. So, on electricity prices, the National Energy Guarantee which we know would also reduce prices together with other things happening in the market by $400 a year on a standard $1500 household bill. Next year, we've made it very clear that we will be working hard on how we can deliver middle income tax relief. So, over the summer and the lead up into next year's Budget and beyond, what you know the Prime Minister and I will be working on is how to cut people's taxes as we already have on income taxes and company taxes. The Labor party, they'll be working on how, if they're elected, they can increase them and I think there's a very clear choice there.
LANE:
How can you deliver on that pledge to cut personal income tax and still meet the projected surplus for 2020-21?
TREASURER:
We certainly won't be doing it unless both of those requirements are met and we're obviously confident that we can meet both of those and we're the Government that has secured and held on to our AAA credit rating despite this time last year, when it was under a lot of pressure, we once again were able to deliver a Mid-Year Update and then a Budget that gave international ratings agencies confidence because we are meeting our targets. Next week, early next week on Monday, we'll be handing our Mid-Year Statement and that again will demonstrate the Government is on track and that continues to give confidence about our economic and fiscal management and you know the mess we inherited.
LANE:
The Coalition is obviously deeply worried about its prospects in Bennelong, if the party's actions any guide. The Prime Minister's visited, Julie Bishop's visited the seat several times, Paul Fletcher, Christian Porter, Marise Payne, Greg Hunt, yourself, Josh Frydenberg, even John Howard's been on repeated visits. That high tempo seems to illustrate the Coalition is very worried about losing it.
TREASURER:
It's an important by-election and you'd expect all of us to turn up as we would and I'll be out there on Saturday as well and there's a simple reason for this, a vote for Kristina Keneally is a vote for Bill Shorten in Bennelong. It takes Bill Shorten a step closer to being able to put in place his high tax agenda. They want to put in $164 billion of higher taxes on the Australian economy. Our Australian economy is re-emerging. We're creating 1000 jobs – on average, thereabouts – this year a day as a result of where the economy's heading and the strong settings we've put into the economy. We want to see that keep going. We want to see small businesses keep their tax cuts and the Labor party will reverse those tax cuts. So there's a clear choice in Bennelong and a vote for Labor is a vote for Bill Shorten.
LANE:
If Labor wins it, how damaged will Mr Turnbull's leadership be?
TREASURER:
I don't believe that will occur because I'm trusting the good people of Bennelong…
LANE:
So it's in the bag?
TREASURER:
No, I didn't say that all, Sabra. You can't put words in my mouth. What I've said is that I think there is a strong case for John Alexander who's been a great local candidate, a great local member in Bennelong for many years now, he's got a track record out there, there's $100 million extra that's going into the Macquarie transport interchange. By contrast, you've got a failed premier of New South Wales who ran the economy into the ground and is using this by-election as a job advertisement to take Sam Dastyari's job in the Senate. Her heart isn't set on representing the people of Bennelong, it's wherever she can represent the Labor party and this can be a good job application from her point of view to get a seat in the Senate. That's pretty clear after the shocking events of yesterday when Bill Shorten failed another test by not kicking Sam Dastyari out of the Labor party. Once again, he just did nothing. He just sat on his hands and allowed this chaos to ensue, just like he did on his own side on the citizenship issue.
LANE:
Treasurer Scott Morrison, thank you for joining the program. We're out of time.
TREASURER:
Thanks very much, Sabra.