Doorstop interview at Smithfield, Sydney

MINISTER FOR CLIMATE CHANGE AND ENERGY, CHRIS BOWEN: Thanks for coming everyone. We are here today in Smithfield, and suburbs like Smithfield are what it’s all about when it comes to talking about yesterday's very decisive energy package. People in the suburbs of Australia didn't start the war in Ukraine, which has caused, we know, 90% of the price rises in energy around the world. But without government action, they would be paying the cost. And just across the road is the Smithfield-Wetherill Park Industrial Estate, the biggest industrial state in the southern hemisphere. There are people going to work in factories and in plants that heavily rely on gas, whose jobs would be at risk next year through no fault of their own and no fault of their management because of energy prices. So difficult times call for decisive action and that's exactly what Australia's governments did yesterday, led by the Prime Minister.

Yesterday, the Albanese government, working in partnership with the States, took decisive action in the face of very difficult times. The actions that the governments took yesterday will see the sting taken out of next year's electricity and gas price rises. That's what Australians were looking for governments to do and that's what we delivered working together. And just like the Prime Minister did yesterday, I want to thank the states and territories, all of them Labour and Liberal, for working together with us to put this package together. 

I welcome the feedback from groups around the country. The Australian Industry Group said this package would likely be very helpful in dampening the immediate economic pain of this global energy crisis. ACOSS said this was an important step towards preventing disaster for the most vulnerable people in our society. The Energy Users Association said yesterday's announcement was a balanced approach to the gas crisis that looks after domestic energy users and the national interest and gives manufacturers hope. And the Energy Consumers Association said it would help to curtail further price increases while shielding consumers from the very high impact of high energy bills. That's what it's all about. That's what we were trying to do, that's what we did do yesterday.

There's one group that hasn't welcomed yesterday's announcement and that's the Federal Opposition. It says more about them than it does about the government. That Peter Dutton says that an intervention to stop price rises is a catastrophe. He thinks it's just fine to let a few companies make a lot of money while the war is going on in Ukraine, but not to shield Australian consumers from these price rises. He seems to think that it's a catastrophe to step in and help Australian consumers. Well, it says all about the Liberal Party today. This is the Liberal Party, which, of course, hid the last price rise, that was their plan, to hide it from the Australian people. Angus Taylor, the now shadow Treasurer, the man who purports to be the alternative Treasurer of Australia, actually changed the law to hide price rises from the Australian people.

Our approach is very different. We're upfront in the budget about the challenges, we're upfront that we were going to act. We worked through all the implications, all the options, very carefully, sat down with the State Premiers, particularly New South Wales and Queensland over the last couple of weeks and talked about their powers as coal fire states, and yesterday brought it all together and acted. We're not suggesting that this solves all the problems in the energy market forever, but we are suggesting this is decisive action which makes a difference to Australian consumers. Australian consumers would have been $230 worse off next year without these actions taken by the Albanese government and the other governments. The Albanese government takes no backward step when it comes to acting. The only person who seems to think that we shouldn't act is Peter Dutton. Well, the Parliament will sit on Thursday to pass the Albanese government's gas cap. Peter Dutton can explain to the Australian people and the Australian Parliament just why he thinks it's okay for gas prices to be over $12 a gigajoule. Before the war in Ukraine, 96% of gas was sold for less than that. The average price before the war in Ukraine was $9.20. But Peter Dutton seems to think it's okay for Australian factories, for Australian consumers to pay more than $12. Well he can explain that.

Yesterday was a big day that came after, of course, the action on Thursday of again the Albanese government working with state and territory governments to deliver a new capacity investment scheme which will unleash billions of dollars of stored dispatchable renewable energy right across our country to ensure that as old power leaves the grid, new power comes on before it leaves. We had four gigawatts of energy leave the grid under the Liberals and only one gigawatt come on. That's a part of the reason why we face this energy crisis. So when you put Thursday and Friday's announcements together we have a very, very serious response, a very well thought out plan for the short term and for the medium and longer terms as well, as we underpin this most important transition underway in the Australian economy in the face of the biggest global energy crisis in more than 50 years. I might take questions from the journalists here in Smithfield first and then take questions from the journalists in Canberra.

JOURNALIST: Minister, you mentioned that households will be $230 better off. How much for businesses, and can you explain how this is actually [indistinct] what they're already paying?

CHRIS BOWEN: So obviously businesses varies. You got factories that are very heavily reliant on gas in some instances. We believe the gas cap and coal cap working together will reduce gas prices by 16 percentage points. So it will vary from business to business. And of course the Treasurer is going to interact with his state counterparts about the relief package for consumers across the board as well. And that will be a discussion which happens over the next couple of months. Obviously, as I said, we were facing price rises next year of 36% as the latest figures, that's not acceptable. Either you intervene and you take the sting out of those price rises or you don't. We believe in intervening. Peter Dutton doesn't. That's the difference. Caitlin?

JOURNALIST: So do you commit to phasing out these caps after twelve months? And if it is only temporary, then what's the kind of more medium-term plan? Because the war may not even be over.

CHRIS BOWEN: We certainly tend for this to be a temporary and targeted measure. Absolutely. The gas caps will be replaced by the manager code of conduct for gas purchases. So that comes into place after the gas cap comes off. That will allow the ACCC to intervene for a fair price. So we're replacing the gas cap with a new regime. And obviously the coal caps will also be temporary because they shouldn't be in place forever. What we will do though, is continue with the medium term plan. As I said, the Capacity Investment Scheme, rewiring the nation, putting emissions reduction in the national energy objectives. All these underpin the transition, importantly, to renewables, because renewables is the cheapest form of energy and there's one form of energy which Vladimir Putin cannot disrupt. That's the flow of sun to our land mass and the flow of wind on and off our shores. And increasingly that will play a bigger role in our energy grid. It's cheaper and also not subject to the international geopolitical crises that coal and gas have been.

JOURNALIST: At the end of these measures, will homes and businesses be paying more or [indistinct] than what they were paying before your government came in?

CHRIS BOWEN: Well, we're certainly not suggesting that this is a magic bullet or will see energy prices fall. What we are suggesting is that this takes the big impact of the increases out of the system. Out of the system. And especially when you add in the rebates, which the Treasurer will be discussing with his state and territory colleagues in coming weeks, that sees real relief flow through to those who need it the most. I might go to questions in Canberra if that's okay, then come back to you, if that's all right. Give Canberra a go on the phone. Who wants to go first from Canberra?

JOURNALIST: How many Australians to you expect to be eligible for discounts on their bills, and what sort of discounts are we talking, in terms of amounts?

CHRIS BOWEN: Well, that really depends on the negotiations, Fiona, from Jim Chalmers and the state colleagues. We want to work that through very carefully. So we're putting $1.5 billion on the table to be matched by those states who want to participate. So that's a very big impact on bills. Of course it will be targeted to those who need the support the most. We're very clear about that. But there are some details to be talked through with the states. We don't expect the states to sign on. You don't sign unseen to a deal without talking through with them how many people in their particular state would benefit and how the scheme should be designed. But we're putting $1.5 billion of relief on the table to be matched by states who choose to participate. That's a lot of relief flowing direct to bills. It's non inflationary because it reduces the bill before it arrives in the letter box, which we always said we would avoid and we have avoided in this package. Okay, we got a question here from the ABC.

JOURNALIST: Australian Petroleum Production and Exploration Association has warned it will only drive up prices in the long run because it'll scare away investors. How is the government thinking about [indistinct]?

CHRIS BOWEN: Well, with respect, I just reject that argument. I mean, people were making $12 a gigajoule last year and they were investing. So the idea that you need somehow elevated war profits to make investments work, I just reject that. And I find that a particularly difficult argument for people to mount. These caps don't apply to new gas installations. We've carefully designed it to ensure, just as governments around the world are intervening, every government around the world has had to come up with a response that they wouldn't have contemplated twelve months ago or two years ago. Right wing governments, left wing governments are all working through these issues. And I would just say to people, given that 96% of gas was sold before Ukraine war for $9 - for less than $12, and the average was $9.20, let's just be a bit reasonable about the profits you want to make from the Australian people. We're not capping export prices. If you want to make money from exports, that's okay, but we will cap, are capping, insist on capping the prices for Australians. It's Australian gas under Australian soil and Australians should not be paying elevated war prices for that.

JOURNALIST: So the government’s modelling still says that power bills will still increase by 23% next financial year under these changes, instead of 36%. Big difference, but it's still 23%.

CHRIS BOWEN: Plus the rebate. Plus the rebate. 

JOURNALIST: Well that can be [indistinct]. Given that if it's 23%, what sort of credit do you expect to be getting from the Australian people? 

CHRIS BOWEN: Well, again, the government doesn't pretend that this is the answer to all the problems, but the alternative path was to sit by and let 36% increases flow through. And, yes, the coal and gas caps will make a difference. There are some other factors into energy prices as well, of course, but this is the biggest lever we could pull. Then you add the rebates on top of the figures that you quote and you're providing, you put them all together, very substantial relief, particularly those Australians who are doing it toughest. Might go back to Canberra, if that's okay. Or did you have one more, Caitlin? Okay, sure.

JOURNALIST: Just on a devil's advocate thing about the [indistinct] for the relief, doesn't the elevated prices kind of compel people to move faster towards renewables?

CHRIS BOWEN: Nobody's more in favour of the move to renewables than I am. Nobody. But the way to do it is not to make the prices of existing power exorbitant. I mean, that is not the way to do it. The way to do it is what we're doing. Rewired donation to bring the transmission on, had the Capacity Investment scheme to bring the investment on and to provide all relevant assistance through community batteries, solar banks and everything else we're doing. It's not to see Australians paying these war prices and to provide no relief. That is not the answer to the transition to renewables. Canberra?

JOURNALIST: Thanks. Just a couple of questions, you said that some of the states, or those states that wanted to participate, will work out how much the rebates are going to be. Does that imply that some states might not participate in [indistinct] rebates? And secondly, when do those states, that do participate, when will people start to see [indistinct], when will they notice a decrease? 

CHRIS BOWEN: Sure. Thanks, Rob. Look, to be fair, we made the offer of rebates to the states yesterday. We don't expect them to, you know, immediately respond. The Treasurers, the Premiers, the State Energy Ministers will obviously take a little bit of time just to think about how it interacts with their own schemes. Many states have their own schemes. We've made it clear that this needs to be additional. This needs to be additional to existing support. So it's only fair that they take a little bit of time to work that through and that the Federal Treasurer has rightly made himself available to talk to them about that. So hence, we didn't make that a condition of agreement. We have said that that offer is available from the Commonwealth to every state and territory, and different states and territories are in a different situation, especially Western Australia, which has a different energy market and different rules in place. So they'll think about how it interacts. As to when it will apply, we're keen to see it apply from the first quarter of next year. Okay, I might just say if there's any more on energy, because then we got a question on another topic from here. So has anybody else got a question on the energy packages?

JOURNALIST: I do.

CHRIS BOWEN: Yes.

JOURNALIST: So why do Australian tax payers have to be the ones footing the bill on these discounts? But there have been suggestions that maybe a tax on the fossil fuel industry could take this.

CHRIS BOWEN: Well. I mean, we're doing a couple of things, Fi. The cap is an intervention, which I don't expect every coal and gas company to welcome, but it's an intervention in the national interest. Sure. We looked at all sorts of models, all sorts of options. This is the one that we decided could have the most impact, most sensibly, most quickly. In addition, I think most Australians would say it's fair enough for the government to step in with these rebates to help those Australians most at risk of these increased power bills impacting on their way of life, to give them some relief. That's an appropriate thing for a government to do. Okay. Yes. You had another question.

JOURNALIST: [Indistinct] Iran, as well as financial sanctions on Iranians supplying drones to Russia. What will those sanctions actually do? [Indistinct]?

CHRIS BOWEN: Well, I mean, I'm very proud of the action that Penny Wong has taken as Foreign Minister. This Magnitsky Act hasn't been applied in Australia in the past, and it's right that it does apply because sanctions on nations have a role to play. But sanctions on individuals who make the decisions, I think, have an increasing role to play. And again, we're not here to pretend that the action by Australia is the most decisive thing in the future of Iran, or Russia for that matter. But it's the right thing to do. It's the right thing to do. And what we're seeing play out in Iran is stomach turning and disgusting. And an affront to human rights, particularly of women everywhere, and Australia should join, has joined the international condemnation. And condemnation is again important. But when you add these sorts of sanctions, it becomes condemnation with just that little bit extra meaning, which I think is appropriate. And I really hope that there's progress in Iran in the coming period and that the Iranian people get the democracy that they deserve and the rights they deserve, particularly Iranian women. And I think we can all look at the protests and the actions in Iran with admiration of their bravery and with condemnation of those who are undertaking this oppression, including the execution in recent days, and we can act. And that's what Penny Wong has done. And I'm very proud of the action she's taken. As a colleague and a friend.

JOURNALIST: Just with that, the financial sanctions [indistinct] supplying drones to Russia, do you think that will have an impact? Can we expect more action?

CHRIS BOWEN: Well, again, I think when you look at the action we've taken and put it together with the action around the world, it adds up to a substantial package. Again, we're not here to pretend that Australia is a great financial partner of Iran or Russia. We don't make that claim. But it's important when doing this that you close off options for countries like Iran and Russia who are doing the wrong thing. We don't want other countries to have sanctions in Australia have none, and that Australia becomes an option for them. We don't want Australia as an option for people who are abusing human rights. So I think that's what these sanctions are about, reducing the options for people who, in Iran's case in particular, oppressing human rights, and in Russia's case, illegally and immorally invading a sovereign nation with no provocation whatsoever.