Radio interview with Sabra Lane, ABC AM

Transcript
18 Oct 2017
Prime Minister
National Energy Guarantee
E&OE

SABRA LANE:

Good morning and welcome to AM Prime Minister.

PRIME MINISTER:

Good morning.

SABRA LANE:

The Energy Board asserts that consumers will save anywhere between $100-110 a year, or $2 a week, compared with business as usual under this plan. There is some scepticism. When will we see the modelling behind this?

PRIME MINISTER:

We’ll they are undertaking that, they’ll be undertaking that now and we’ll see that before it gets discussed in COAG. That is what they’ve committed to.

SABRA LANE:

So it is a figure plucked out of the air so far if there is no modelling to back it?

PRIME MINISTER:

No. You are not giving the Energy Security Board the credit it deserves.

These are the most knowledgeable experts in the field and they’re not academics. This is the head of the rule making Energy Market Commission, the Energy Market Operator, the Energy Regulator and of course, Kerry Schott, the Chair of the Energy Security Board.

So this is a very distinguished and expert group that have considered this issue very carefully and they have advised us that this is the way to deliver affordable and reliable power, meet our Paris commitments and do so at the least cost and we take that advice very seriously.

And I think it is about time we took the politics and the ideology and the slogans out of this debate and focused on that expert advice.

SABRA LANE:

I’ll get to the board in just a tick. Back to those figures, will you guarantee those price reductions?

PRIME MINISTER:

What I can guarantee is that we’ve got those price figures, those cost figures, in fact, which is based on their estimate of a 20 to 25 per cent reduction in wholesale generation costs. We've got that. I can guarantee that the people that are giving those figures are the best informed and the most knowledgeable in the industry.

SABRA LANE:

You are guaranteeing that they’re the best informed but you’re still not guaranteeing those figures.

PRIME MINISTER:

Sabra, what I’m guaranteeing is that we are taking advice from the best people in the field and that is unquestionably the Energy Security Board. I mean COAG, the Labor premiers- hang on -

SABRA LANE:

We’ll get to a board in just a tick.

PRIME MINISTER:

No, no, hang on-

SABRA LANE:

I'm sorry, Prime Minister-

PRIME MINISTER:

What are you sorry about? What are you apologising for?

SABRA LANE:

I am sorry to interrupt you. But-

PRIME MINISTER:

Okay. Right. Good.

SABRA LANE:

The Coalition has made affordability an issue.

PRIME MINISTER:

Yes.

SABRA LANE:

These figures have come from where? There’s no modelling to back it up?

PRIME MINISTER:

No, they’ve come from the Energy Security Board.

SABRA LANE:

Well let’s talk about the Energy Security Board

PRIME MINISTER:

Yeah, sure.

SABRA LANE:

It is made up of the Energy Market Operator, the Energy Commission, the Regulator-

PRIME MINISTER:

Yes.

SABRA LANE:

Bodies that oversaw the last 10 disastrous years of energy policy in this country? Why are now they the saviours?

PRIME MINISTER:

Well, there is nobody better qualified to talk about the way the market operates and how we can best ensure reliability. The Energy Market Operator is headed by Audrey Zibelman, who did the similar job in New York, until she came out to Australia. She is, as she said yesterday, regularly intervening in the South Australian market to keep the lights on because of the failure of politics in South Australia and the introduction of a massive amount of wind energy in that state without the back-up or the security to ensure system reliability.

So, Sabra, look, you can, if you wish, disrespect these distinguished and expert Australians, I don't.

I'm taking their advice - and I just want to remind you that that Energy Security Board was established by COAG. There were more Labor Party governments supporting the establishment of the Energy Security Board-

SABRA LANE:

It was but these-

PRIME MINISTER:

And they will give the same advice to the COAG governments as they have given to us and all I'm saying, my only request, is that their advice is considered very carefully and respectfully and, I mean - I was surprised to hear your attack on those distinguished Australians.

SABRA LANE:

Well, I’m sorry.

PRIME MINISTER:

I think you should - I think we owe them the respect that their credibility and expertise deserves. You know what we really owe-

SABRA LANE:

Sorry Prime Minister – it wasn’t an attack. I am sceptical. These are the bodies-

PRIME MINISTER:

Sabra what we really owe - we a owe a duty to your listeners - to get their power bills down. And that's why we're taking the right advice.

We’re going to establish a level playing field so that technologies can compete, because we owe it to Australians to take the politics and the name-calling and the disrespect out of this debate, focus on the engineering and the economics, that's what the Energy Security Board has done and that is the duty I owe to your listeners and all Australians.

SABRA LANE:

These bodies oversaw the overinvestment in poles and wires and the failure of the national energy grid to be fit for purpose today.

PRIME MINISTER:

Well, Sabra, you can go through the history of it but in fact you will find much of that overinvestment was done at the instigation of state governments that gold plated their networks and then proceeded to overcharge for them.

Of course, there have been a lot of mistakes made in the past but rather than - I can't say how disappointed I am that rather than talking about the substance of the policy I'm sitting here with you on AM and you are attacking the credibility of the people.

SABRA LANE:

I’m sceptical – sorry for - I'm a journalist and I am sceptical and these bodies have failed Australia to date and suddenly now they’re now the saviours of this. Crucial to this plan-

PRIME MINISTER:

Can I just say to you, John Pierce, who’s the head of the Australian Energy Market Commission, John Pierce has always been a critic of the Renewable Energy Target. He’s always said that you need to integrate climate policy and reliability into the same market mechanism and that is common sense, it’s logic, you’ve got to integrate climate and energy policy.

Now I have done that by binging both of those portfolios under one Minister here. We’re doing that with the recommendation of the Energy Security Board. This is a game-changer. That is why it has been recognised and endorsed and welcomed by the energy sector, because they can see this is a game changer and they can see that this will deliver lower prices and more reliable power at the same time as we meet our international commitments.

SABRA LANE:

It’s a game-changer if it’s bipartisan and you need all the states on-board.

PRIME MINISTER:

That’s right.

SABRA LANE:

So far three have said they’re not. What’s plan B if the states do not support this?

PRIME MINISTER:

Well Sabra I think you should say to the states, why don’t you ask them-

SABRA LANE:

The mic’s open and it’s yours - you talk to the states.

PRIME MINISTER:

Right, okay this is the message: The states and the Commonwealth of course, around the COAG table set up the Energy Security Board. We all agreed to put the smartest people on the Board and to take their advice. COAG has sought their advice, so did we.

We’ve received the advice and we’re following it. The same advice will go to COAG. Are the Labor states going to say, "We established the Energy Security Board, we put the smartest people on the board and now we’re going to ignore their advice"?

I mean I don't think that’s defensible. I think Australians want this issue dealt with and they want it dealt with based on engineering and economics that delivers them lower electricity prices.

Now this is not the only thing we’re doing by the way. I mean look at what we have done with gas, we took strong action there, we now have gas - we now have the big gas companies committed to keeping the east coast market supply of gas-

SABRA LANE:

You and I have talked about that.

PRIME MINISTER:

Wholesale prices have come down. We’ve seen people getting a better deal on their retail bills –that’s action now. And of course yesterday through the Senate we got the abolition of Limited Merits Reviews so that the people that have gold plated their poles and wires in the past and have got a regulated price set by the Energy Regulator, are not going to be able to keep on gaming the system and appealing.

So every angle in which we can bring prices down and improve reliability, we’re using. Now that’s the difference between my position and Bill Shorten's. Every policy he has undermines affordability and undermines reliability.

SABRA LANE:

This plan will now depend on regulating the power companies and mandating how much dispatch power they can produce as well as emissions reduction.

PRIME MINISTER:

Well no, well keep going, that’s not quite right but-

SABRA LANE:

How does that square away with the Party that supposedly favours a free market in finding cheaper solutions?

PRIME MINISTER:

Well this does create much more freedom, that’s why it delivers a cheaper outcome because what you’re doing is you’re saying we’re going to have a level playing field, we’re not going to be subsidising one technology over another. They can all compete and there are two things that retailers are going to have to do. They’re going to have to have enough dispatchable power to keep the lights on. I think we’d all agree that’s a good idea - and certainly South Australians are keenly aware of the importance of doing that. And at the same time we’re going to ensure that we meet our emissions reduction commitments under the Paris Agreement.

Now within those two constraints the retailers are free to have the mix of generation that they wish and they will do that and experience tells you that when you give participants in a market the greatest freedom to meet defined objectives, they will find the least cost ways of getting there.

You get more certainty, you get more investment, that’s why John Pierce and the rest of the ESB have said this will result in a better outcome for Australian families.

SABRA LANE:

Prime Minister, thank you for joining AM this Morning.

PRIME MINISTER:

Thanks so much.

[ENDS]