Transcript of interview with Linda Mottram, ABC Sydney 702
THU 09 AUGUST 2012
Subject(s): Power prices; Carbon pricing
E & O E – PROOF ONLY
HOST: Julia Gillard good morning. Welcome back to Mornings.
PM: Good morning Linda.
HOST: Now, the Chairman of the Australian Energy Regulator has been telling the Herald that Australian consumers are paying too much for power. Who or what do you blame exactly?
PM: That’s a very important intervention in this debate. You’re right the regulator has said people are paying too much for power and when the people of New South Wales have seen 70 per cent increases over the last few years it’s not surprising that he’s saying that.
He’s pointing to the regulatory arrangements, these are shared between the Federal Government and the states. Now, of course that’s one thing that needs to be squarely on the table as we move towards the December meeting of the Councils of Australian Governments where I want to see action.
And Linda I am heartened that today both the New South Wales and Queensland Energy Ministers have shown some movement here. Now we’ve got to take that movement build on it and translate it into action that makes a difference to power price rises.
HOST: Tony Abbott this morning on AM said the arguments about the regulator and polls and wires and so forth are ‘a furphy’ here’s a little of what he had to say.
ABBOTT GRAB: This is a fabrication by the Prime Minister. This is an absolute furphy from the Prime Minister. Why would be believe the Prime Minister now about so-called gold plating of power infrastructure when she’s never talked about it for the last five years?
HOST: Julia Gillard, it has been on the agenda for a while and you say 70 per cent increases in New South Wales over the last few years, Labor Governments were in power here. Why haven’t you spoken about this before?
PM: Well actually I did speak about these matters in 2010, but really the timing of this debate is vital because of two reasons.
First, we have been commissioning a whole lot of technical work that we need. Our Minister for Energy, Martin Ferguson has been doing that and all of that technical work is coming to fruition now.
And second, in the first six months of next year, price determinations will be made which effect the next five years. That’s why this is the window with the technical work coming on stream for us to act and to make a difference to those price determinations.
And on the Leader of the Opposition’s intervention which you’ve just played to me, he’s at odds with his state Liberal colleagues. The state Ministers for Energy in New South Wales and Queensland who in today’s newspapers are recognising that there is a problem here.
So it seems that the Leader of the Opposition is the only person who’s denying that there is a problem with the current system and that that’s causing a problem for families, for pensioners, for people around the nation who are seeing rapidly escalating power bills.
HOST: The regulator says his powers need to be overhauled to stop the networks from over-investing. You’ve said that you’ll act by December if reform isn’t agreed. Now as you say, we’ve seen some movement by the states.
But what will you do if you can’t get the agreement that you want.
PM: Well my aim is going to be to get agreement and we are seeing some movement from the states and that’s good. Linda, I’m not going to outline today all of the Government’s possibilities and options here but what I can certainly say to you is, no change is not on the table.
We have to see change. I would prefer to see that change done in a cooperative way. The recognition that there are problems with the way in which the poles and wires are being invested in from the Queensland and state ministers today is welcome. Let’s build on that and get an agreement for change in December.
HOST: Prime Minister, if you’re happy to take a couple of calls, we’ve got a couple waiting.
HOST: John is on the line. Good morning John. What do you want to put to the Prime Minister?
CALLER: Good morning Prime Minister.
PM: Good morning John.
CALLER: My question relates to state and Commonwealth partnership in relation to development of, if you like, a better electrical distribution grid and I’m wondering if the states, given the revenue that they’re getting as a result of the legislation that they have in place at the moment, adequately partnering with the Government to develop smart electrical grids that support distributor energy models?
HOST: Smart grids, Prime Minister.
PM: Smart grids, I had the pleasure of looking at the operation of a smart grid in Newcastle yesterday. We’ve facilitated the development of that smart grid through a $100 million investment and it does enable the people participating in the trial of it to do amazing things.
I met with a family that’s got a fuelled cell in their house and that is generating energy for them. It means that their power bills are not what they used to be.
The smart grid is also enabling people to get real time information about their energy usage and to therefore make decisions about how they’re going to use energy rather than just getting one bad shock when they open up the power bill.
So, I’m a big supporter of consumer information, of smart grids, I actually want to see action now. We’ve got a national consumer framework which would give people better information. We’re pressing the states to sign onto it including New South Wales which has failed to sign on for no technical reason. It could sign on today.
HOST: Prime Minister, Sue is on the line too. I think Sue has a question that sort of relates to other ways of looking at this problem. Good morning Sue.
CALLER: Good morning, good morning Prime Minister.
PM: Good morning Sue.
CALLER: Why are we not seriously discussing and encouraging our long term, our move towards a solar industry? That seems to be the most obvious choice to head towards – educating us as consumers and helping and encouraging the industry.
HOST: What do you mean by serious encouragement, Sue?
CALLER: Well putting money towards solar industry and seriously helping us, making us use our solar resource.
HOST: Prime Minister?
PM: Sue, that’s a good observation. We are a nation of abundant sunshine. We’ve also got access to other sources of renewable energy – wind power, tidal, geothermal.
We have put $10 billion into the Clean Energy Finance Corporation and we’ve also been a significant investor in a body we’re calling ARENA. ARENA is about catalysing the science, the developments that we need in renewable and clean energy and the Clean Energy Finance Corporation is about partnering with the private sector to get these new investments over the line so that we can see more widespread development of renewable and clean energy sources including importantly solar.
HOST: The power companies though, Prime Minister, are very powerful aren’t they and the coal lobby, you know, in terms of encouraging alterative energies you’ve got those big networks, those big companies on your back. They’ve been sitting there for decades not improving networks, raking in the money. How is it that we could expect them to begin to adjust to a new environment if you like and play a part in the new structure of our energy supply?
PM: Firstly Linda, we’ve had a big fight and we’ve won it in favour of renewable energy and a cleaner energy mix for the future and that’s putting a price on carbon. Putting a price on carbon, reducing carbon pollution, will drive our nation towards a clean energy future and Linda, you know as as someone who’s in the media business and commentating everyday how hard that fight has been. But we’ve won through because it’s the right thing to do for our nation’s future.
I’m determined to also win through on a fight which is about the real drivers of rapidly escalating power prices.
HOST: Are you promising that consumers will have lower power bills, Prime Minister?
PM: This is about future price determinations, it’s about not seeing the rapid rate of increase that we’ve seen in the past. I mean, 70 per cent in New South Wales; we cannot see in the years to come another 70 per cent and then another 70 per cent.
So I want to make a difference to the price determinations that will happen next year.
Then of course there are the issues of smart grids and the, you know, distributed networks and different ways of generating power which we’ve talked about as well and some of those new technologies and more information for consumers can enable people to actually realise a reduction in their power usage and power bill – the power that comes through the grid being reduced.
HOST: One of our texters earlier today said that she was pleasantly surprised when she got a bill – she thought the carbon tax was going to account for a lot more – it was only a tiny proportion she says. But she says of your Government, they’ve sold it so badly. Why call it a tax for a start, sold it so badly that everyone will associate it with their high bills.
Is that part of why you came out this week, Prime Minister? The politics of this has not been on your side?
PM: I came out this week because it’s the right time to start a debate that should lead to action in December. We can’t afford to miss this window and that’s why I’ve made sure that this debate is well and truly on the national agenda.
And it’s a debate that leads to action in a known time frame, and that timeframe is December.
On carbon pricing, there’s been the mother of all fear campaigns, ridiculous claims made, people have seen a lot of false claims made and that’s generated fear amongst people that they’re going to see for example, bigger power price rises than carbon pricing actually delivers.
People now will be in a position to have all of the information because they’re living the experience and judging for themselves. What they’ll certainly see in their power price bills, they’ll see a 10 per cent rise – we’ve always said it would be a 10 per cent rise – but it comes with the assistance from tax cuts and family payment increases and pension increases, which means that the majority of households are either better off or come out square.
HOST: A couple more callers if you would, Prime Minister?
HOST: Marie’s on the line. Hello Marie.
CALLER: Hi, I’ve been supporting alternative energy generation by paying a premium for 100 per cent green energy for 10 years. Following the introduction of carbon tax, my energy supplier has still expecting me to pay a premium on my 100 per cent green energy when people who are not supporting those technologies are getting it cheaper than me.
I just am flabbergasted about that.
HOST: Should that change Prime Minister?
PM: Marie, I’m happy if you want to leave your details with Linda’s producer to follow your specific case up for you and the case of your individual power bill. Obviously the carbon price is a price per tonne of carbon pollution. So it is paid by those businesses, big businesses that generate a lot of carbon pollution.
But I’m happy to look at Marie’s individual case.
CALLER: I’m buying 100 per cent green energy, then they should not be expected to pay the carbon tax and therefore should hand a discount on to me if I’ve been paying a premium for all those years, wouldn’t you say?
PM: I’m happy to look at it Marie and just get to grips to the details of your case.
HOST: Marie I’ll put you on hold and you can leave your details. We’ll pass them on to the Prime Minister. But Marie does have a good point, a lot of people must have complained to you, Prime Minister on this issue about having to pay extra for getting energy that is generated from green sources, to use that phrase.
Is that something you’re looking at?
PM: I just think we’ve got to be a bit careful here about what is the source of costs for people. Obviously the carbon price – it’s a price per tonne for carbon pollution – big businesses pay it. It will change their behaviour and they will reduce the amount of carbon pollution they’re putting in the atmosphere.
Some of those costs are passed on and when I’ve talked about a 10 per cent increase in electricity, that is the passing on of some of that cost and that’s why we’ve provided the assistance.
Separately to any of that, there are people, and Marie sounds like she’s one of them, who over a long period of time have been prepared to pay their own premium – nothing to do with carbon pricing – to get cleaner energy because they believe in a cleaner energy mix.
So we’ve just got to make sure we’re not confusing people about what is leading to what.
HOST: Just a very quick score check in the basketball Prime Minister. Fourth quarter, US – 87, Australia – 75, it’s very close.
PM: Time to start biting nails I think Linda.
HOST: Bite away Prime Minister. A couple more calls – John’s on the line. Hello John.
CALLER: Good morning, good morning Prime Minister. The question is, if there’s a $23 a tonne carbon price, fixed for three years, does that mean there’s only a one-off increase in the base of electricity prices that all of us are paying?
PM: The carbon price is continuing so you’ll see a new price level if you like, from carbon pricing and that new price level will continue, as will the tax cuts, the family payment increases and the pension increases.
So it’s a 10 per cent increase, it’s not a compounding 10 per cent increase, it’s a 10 per cent increase that you will see in your bills ongoing. And you’ll get the assistance ongoing too.
HOST: Thank you very much for that John, and one last caller very quickly. Shankaran.
CALLER: Hello, good morning Prime Minister.
PM: Good morning.
CALLER: Just want to you know, a lot of Australian homes doesn’t have gas connections at their home, because the gas providers doesn’t want to give connections. Now during the winter we use a lot of electricity just for heating purposes.
Why don’t the Government give some sort assistance to these providers to give gas connection to every home? We have plenty natural gas in Australia, so we should utilise that resource.
HOST: Okay, thank you for that.
PM: We do have plentiful gas and there are some constraints at the moment about moving it around the nation so that it does get where it’s needed and where people want it.
I was a little bit earlier this week, when I made my first speech that started this electricity price debate, I was at an energy institute where we were also talking about some of the constraints on gas supply.
So yes, that is an issue too and one that we need to be thinking through, and our Minister Martin Ferguson is thinking that issue through in the context of the Government delivering an energy white paper, which will be about all sources of energy, not just electricity.
But whilst we’re working through those issues, we can’t miss the moment for acting on power prices, electricity prices for the future, which is why I’ve been so focused on that this week.
HOST: Prime Minister, in terms of this discussion about receiving now a gold-plated distribution network, as it’s being described, that is over-investment in poles and wires. Should Australians wind back their expectations of the reliability of supply, and perhaps be willing to tolerate brown-outs, perhaps even black-outs on those few days a year when power demand peaks?
PM: We’ve got to have a reliable energy supply. There’s some silly commentary around today about this whole debate is all about brown-outs and people not being able to put their air-conditioning on. Of course it’s not about that – I want people to have a reliable energy supply and I made that point very strongly when I gave the speech a little bit earlier in the week.
But experts in the area are pointing to the fact that we are seeing very costly investment is poles and wires – some of it over-investment – above and beyond what we need for a reliable energy supply.
And we are not making the most of getting consumers information so that they understand about peaks and costs and make some decisions themselves about how they’ll use energy.
HOST: Control over their own usage, via various meters that tell you what’s happening at a certain time?
PM: Absolutely and I would point, there’s a piece by Malcolm Roberts today in today’s newspapers, who’s the chief executive of the Energy Networks Association and he for example points to South Australia and says 20 per cent of network capacity is needed for the equivalent of 23 hours a year, and then goes on to talk about the benefits of having more information in the hands of consumers so they can make choices about how they’re going to use their power.
HOST: Prime Minister, it’s been good of you to join us today, I have a thousand other issues to ask you questions about but it won’t be for today I’m afraid.
PM: We’ll have to get back to chomping those nails and the basketball.
HOST: Yeah 90 to 75, Prime Minister in the fourth quarter, so it’s not that close, but we can pretend anyway. Thanks for your time today.
PM: Thank you.