SABRA LANE:
Good morning, Treasurer, and welcome.
TREASURER:
Good morning, Sabra.
LANE:
Has privatisation of the energy sector failed Australian consumers?
TREASURER:
Well, I don’t think you can necessarily draw that conclusion. I think what’s important with what the Prime Minister and I will be announcing later today is that to deliver energy security, affordability and sustainability you’ve got to work across all the different areas. We’ve been working on the gas side of things, as you know, getting all the gas producers in to ensure we get an assurance about their supply to the domestic gas industry. On top of that, there’s the work being done on pumped hydro. There’s the Finkel Report, there’s the Vertigan work that’s being done on competition policy in the gas industry and now on the retail side of the electricity market, we believe that’s necessary to ensure that consumers are getting the best deal there. You’ve got to apply pressure in every stage of the process to ensure that Australians get more affordable, more secure, more sustainable energy.
LANE:
Alright. The ACCC can actually compel power companies to hand over information about consumers.
TREASURER:
Correct.
LANE:
By ordering the ACCC to do that, it sounds like you don’t trust the companies to be upfront with what they’re actually charging consumers?
TREASURER:
The ACCC has these powers for a reason and they did excellent work on the east coast gas market, and that took them about a year to complete. It is a very extensive analysis and that led to a lot of the work that we’re now doing in the gas market. It highlighted the risks that were ahead of us so I think these are important powers the ACCC has. We use them appropriately and, in this case, having addressed the issues coming out of the gas market, we must address the issues in the retail sector of the electricity market.
LANE:
Are you worried about price gouging? I mean, the Grattan Institute found just a couple of weeks ago – it said in Victoria, for example, the profit margins for the companies were probably double than what they should be. In that state alone it estimated that probably they were making $250 million in profit, which is about $100 per family. Do you think that that kind of an example might be indicative of what’s happening around the country?
TREASURER:
Well, that’s the purpose of the inquiry. I think that that study amongst others…
LANE:
So you’re worried about gouging?
TREASURER:
… highlighted some real questions and that study actually suggests that those margins may have been higher in Victoria, in particular, there wasn’t the explanation of the significant investment in the network that might have actually explained some of those cost rises. So the disconnect between what was happening in retail prices and wholesale prices raise some real questions. Now, that study itself highlighted, that’s based on the information that we have and so it’s important that there be better information on this, and we agree. And that’s why we’re taking the action we are but it’s only one of many actions is my point, Sabra. The Government is working right across the spectrum to deliver more affordable, more secure, more sustainable electricity prices.
LANE:
We’ve looked at those particular issues recently in the last month, will you consider re-regulation, even partially, if that’s what the ACCC recommends?
TREASURER:
It’s up to the ACCC to do their inquiry and come back with a full analysis. I mean, this is a very complicated sector…
LANE:
But often Governments commit to having investigations and they cherry-pick recommendations?
TREASURER:
I like to see the work get done and make decisions based on evidence.
LANE:
Despite people telling the consumer group Choice, survey after survey, that electricity prices are their number one concern over and above mortgage repayments, consumers seem to be reluctant to change power companies. Why do you think that is?
TREASURER:
Australians can tend to be fairly sticky consumers. The same is true of the banking sector as well and we have frustrations there, and for consumers to get greater power in the market, they need to be a little less sticky. But that’s a matter for consumers and the choices they make themselves.
LANE:
Have you looked at your own power bill?
TREASURER:
I do but my wife tends to make sure these things are managed at home because I’m sadly never there.
LANE:
If the Government fails to achieve cheaper or lower electricity prices, do voters have the right to toss you out at the next election?
TREASURER:
The voters always have the right to do whatever they want, Sabra. They get to decide who their Government is…
LANE:
Given the focus of…
TREASURER:
It’s a matter of the plan and we have our plan and that includes everything from doing major projects like where we’re going with Snowy 2.0 through to what we’re doing in the gas industry. I can’t stress enough how important it was for the Prime Minister to actually get those gas producers and suppliers in that room. That is one of the most central, most immediate challenges to delivering what we need to deliver on in the energy sector. There are enormous pressures in this area so we have a clear plan to deal with it and more importantly, we have actions that are happening as we speak. Now, Labor’s plan is to actually have a 50 per cent renewable energy target and basically drive prices through the roof without any control…
LANE:
Let’s talk about what the Government’s doing…
TREASURER:
Sabra, you asked me what the comparison was in the choice that the voters would have to make. Politics is a choice. We have a plan and action that is hitting the ground. Labor just has a plan to increase electricity prices because of their ideological views.
LANE:
But if you don’t carry through on helping to get lower electricity prices, it’s a clear choice for voters.
TREASURER:
They can choose to pay higher prices under the Labor Party.
LANE:
The ten year Enterprise Tax Plan. This is the final week for the vote. It looks like it will not get through the Senate, the crossbench remains unconvinced. One Nation now is saying that it’s not going to vote on any legislation until the Government sorts out this dispute with cane growers in Queensland. Can you sort that particular problem out this week?
TREASURER:
On the cane growers issue, we’ve been working very hard behind the scenes on this and actually got the QSL and Wilmar – who have been the key protagonists in this bid for many years – we’ve actually got them to a point of agreement that happened some weeks ago and that process is now working it through with being documented and being inked. I understand that a draft agreement will be before QSL today so we’ve been doing the work on that and we’ve been getting the results on that. It resulted in an increase in the term of that agreement from six years to 12 years. That was a direct result of the work done by George Christensen, by the Prime Minister Malcolm Turnbull and myself working together with Barnaby to get these two parties into a room and getting them to sort it out. We did that with the support of our partners up there in Queensland and ultimately, the Queensland Government were embarrassed into the position where they had to take some action. Where we got to is a much better position we’re in. That process takes some time. It was said at the time of reaching that agreement it would take about four to six weeks, that’s the process we’re now in. I don’t think Australians expect their parliamentarians to go on strike. I think they expect them to turn up to work and do the job.
LANE:
Okay. On the Ten Year Tax Plan, that looks like it won’t get through for all the big businesses that you want. Are you prepared to cut it loose, to let businesses with a turnover of less than $10 million get this cut and then continue to argue the case?
TREASURER:
I don’t call a business that has a turnover of $11 million a big business, Sabra. And Labor thinks a business that’s got a $3 million turnover is a big business. I don’t think that’s a big business either. I’ve said many times there are 100,000 businesses with a turnover between $2 million and $10 million a year. They employ 2.2 million Australians and the Labor Party is saying that they shouldn’t get a tax cut – ‘you’re a big business, you’re a multinational’ – you may as well be Google or Ford. I think that’s nonsense. We stand absolutely behind our policy which is to ensure that investment is encouraged in this country and doesn’t go offshore because we’re seeing company taxes fall all around the world. Only the Labor Party doesn’t seem to get that, even the French socialists understand that and put it in their budget and today, we see the Australians on balance are more in favour of these changes than the alternative.
LANE:
What do you make of the speculation, well-informed, about your own position? That it’s dicey and it depends on how next month’s Budget actually is accepted by voters?
TREASURER:
The Budget is going to focus once again on the growth that is needed to support jobs…
LANE:
But on your job and the speculation about your job?
TREASURER:
I’m always judged on my performance – always have been – and very happy with the record of performance in everything from stopping the boats to protecting our AAA credit rating.
LANE:
Treasurer, thank you very much for speaking with AM this morning.
TREASURER:
Thanks very much, Sabra.