Interview with Kieran Gilbert, Sky News Agenda

KIERAN GILBERT, HOST: Let's go live to Sydney. I'm joined by the Minister for Climate Change and Energy, Chris Bowen. Thanks for your time, Chris Bowen. You said in the Parliament this week that you chose the option and the government of being upfront with the Australian people. We take the option of being honest with the Australian people about those energy price forecasts. Did you realise, though, when it was included in the budget that it would erupt as it has and basically dominate everything else out of the budget?

CHRIS BOWEN, CLIMATE CHANGE AND ENERGY MINISTER: We were certainly aware of how big it would be, Kieran. The Treasurer and I, and the Prime Minister and the entire government. Yes, we knew that this would get a lot of attention, but we also knew it was the right thing to do, unlike my predecessor, Angus Taylor, who knew about a 20% increase in electricity prices and changed the law so that it came out a few days after the election, not a few days before. That's the fundamental difference. I think Australians understand that it's tough times in the energy markets right around the world. We're seeing unprecedented pressure on energy prices. Not only are we seeing the invasion of Ukraine, but we're seeing Vladimir Putin weaponise energy prices. We're seeing the Ukraine war carry on in a way which is flowing through to energy prices, making it the most unprecedented energy crisis since the 1970s. I think Australians understand that. They want honesty, we're giving them honesty, and they want action and we're certainly providing a framework for action going forward as well.

KIERAN GILBERT: Given that circumstance, given you said you're about honesty, is it time to just scrap the election commitment and say it's not going to happen, of reductions in power bills of $275 a year?

CHRIS BOWEN: Of course, Kieran, that was modelling in 2021 of a 2025 outcome. The Liberal Party likes to talk a lot about the 275 figure, now. They don't so often mention the 2025 part of that figure. Peter Dutton had a rare moment of honesty in the Parliament this week when he conceded that we were talking about 2025. Of course, that was the modelling of the impact of our policies. And the fact is that this pressure in the system means that the transition to renewables, which we promised in the election campaign, becomes more important, not less. More important to put downward pressure on energy prices. And the IEA, the International Energy Agency, said that this week that actually the war in Ukraine is making the transition to renewables faster and more important. And we agree with that.

KIERAN GILBERT: Minister, Andrew Clennell reported this morning that Clare Savage, the chair of the Australian Energy Regulator, warned to you and other energy Ministers on Friday that if you are going to move, say, in terms of a cap on energy prices or whatever else, it must happen soon because these contracts are being secured very quickly. In fact, action must happen by November. Are you working to that timetable?

CHRIS BOWEN: Let me just deal with the report that you just talked about in both its - in both its parts. Of course, I do want to deal with that head on. I did say to state Energy Ministers the same thing as I've said publicly, completely the same, that the Federal Government will not stand by and allow these pressures to flow through to households and to industry without taking any prudent, responsible and careful action. And we won't go a day earlier, we won't act a day earlier than until we're sure about the policy settings, and nor will we wait a day longer.

I also said to the States that it's very important we're working together, that States have levers, the Commonwealth has levers, we all have some degree of levers at our disposal. It's very important that we're coordinating, talking to each other, ensuring that any action that I take or any action that a State Minister takes is not contradictory to what we're trying to achieve and that we have the lines of communication. I was delighted every single state and territory minister 100% agree with that approach - all of them, Labor, Liberal and Green and they're all represented around that Energy Ministers table.

This is what I've tried to do since becoming Energy Minister in May, to work very cooperatively, closely with my state and territory colleagues. That's what we've been doing. Matt Kean has previously said that the Energy Ministers are being more productive together than at any time in the last six years. And I agree with that because it is a spirit of cooperation. That was my key message to the state and territory energy ministers. They all agreed with that. They are all completely focused on the job. Of course, what happens in Western Australia is very different, what happens in Victoria in terms of the impact. But we all agree that we've got to have a coherent national approach and that means us working together and that is exactly what we'll be doing.

KIERAN GILBERT: But in terms of that time frame, the key message was there's no point in waiting months for a measure like a price cap. Is that your thinking too?

CHRIS BOWEN: Well, as I've said publicly during the week, we won't wait a day longer than we need to. But also under the Albanese government, we have very thorough cabinet processes where we work issues through carefully, methodically, as I said. Also in this case, working with the states about what options they might be considering, factoring them in, giving them feedback, them giving us feedback. That is how good government, adult government, responsible government works in the face of international pressure.

I'm working very closely with my colleagues, the Treasurer, the Industry Minister, Ed Husic, the Resources Minister, Madeleine King and the Prime Minister, of course, to ensure that we're doing everything that we prudently and sensibly can and we are taking the time to get it right. But we won't be waiting a day longer than when we know that the policy settings we have in face of this in the face of this rapidly, rapidly developing energy crisis right around the world. Australians, I think, expect that and are entitled to expect that from the Federal government. That's exactly what they're getting from the Albanese government.

KIERAN GILBERT: It would be diabolical for many people in your seat in southwest Sydney, wouldn't it? If we see the prices included in the budget forecasts and indeed the energy regulator potentially looking at a default offer by further 50% higher, this would be diabolical for many families around this country, wouldn't it?

CHRIS BOWEN: Of course, and industries and businesses and that's why, in terms of households, we did have a very clear focus on delivering our cost of living commitments, whether it be cheaper medicine, cheaper childcare and that is very important. Of course, it needs to be seen in that context of broader cost of living pressures. But we did go to the election with clear commitments in relation to cost of living. The budget begins the process of delivering those. Of course, as the Treasurer has rightly said, not all the government’s agenda gets delivered in one budget.

KIERAN GILBERT: Will you look at [indistinct] at least?

CHRIS BOWEN: Well, look, I'm not going to start ruling things in or out. Obviously, in relation to our package, we'll be looking closely – in addition to the other things I said we'd factor in, what the Reserve Bank is doing and what the impacts of any policy interventions. Both the Treasurer and I, and the entire cabinet – if you like, are reluctant to intervene without being entirely sure of the implications of what we are doing, we are very clearly going to act decisively, but also carefully. That's what a Federal Government run by adults and grownups, which is rather a change after the last nine years of knee jerk policy actions.

This is part of the reason we're in this mess, Kieran. Nine years of knee jerk policies, 22 energy policies couldn't land one of them. Of all the failures of our predecessors, energy policy has to be right up the top of the list and Australians are paying a price for that. Of course, the international factors are very significant, but Australia is under prepared for what we're facing because we haven't had the transition to renewables happen as quickly or as in orderly a fashion as it needed to have happened. But now we've arrived, and we are dealing with it.

KIERAN GILBERT: And your commitment is to more renewables in the system. You've got your Rewiring the Nation policy, $20 billion for improved transmission, basically poles and wires. You say it's the cheapest form of energy, but does that infrastructure spend, the 20 billion and so on, the flow on costs needed - does it mean higher prices as a result of that policy in the short term at least?

CHRIS BOWEN: On the contrary, because renewables are the cheapest form of energy. And by the way, Kieran and this is a lie that some right wing commentators like to perpetrators – as late as today I've read this. They say that those costs don't include storage and transmission. It's not true. Renewables are the cheapest form of energy, even when you count the cost of storage and transmission. It's not just me who says that. The Australian Energy Market Operator says that. The CSIRO say that. Experts right around the world say that. That's why it's so important we get on with the job of that transmission. That's why it was so important the Prime Minister and I announced, a little over a week ago, the big deal with the Liberal Government in Tasmania and the Labor Government in Victoria to develop the Marinus Link, which will see Tasmania go to 200% renewables and export the energy to the mainland. That's great for Tasmania in terms of jobs and investment. It's great for the mainland in terms of access to cheaper energy.

This deal had been talked about for six years. The previous government talked about how good it would be if one day somebody could do it. Within six months, Anthony Albanese and I came in and did it in cooperation with Jeremy Rockcliff and Guy Barnett and Dan Andrews and Lily D'Ambrosio. Getting on with the job because transmission is important, and we'll have more to do to deliver that transmission. But we've been getting on with it very quickly. But I make this point, actually, our policy of spending that $20 billion, as was agreed by energy ministers this week, that concessional finance makes that transition cheaper and will ensure it gets passed on to consumers.

KIERAN GILBERT: Clare Savage, the head of the energy regulator, said it's not just about capping gas prices that needs to be looked at, but the high price of coal is responsible for a big part of the electricity price at the moment. What, if anything, can be done on that front?

CHRIS BOWEN: Well, Kieran, with all due respect to you, and I mean that very genuinely, I'm not about to write the policy on your programme this morning. What I am doing is explaining, of course, as Australians understand the pressures in the system, you are right to say this is not just about gas, of course. And I've made that point consistently right from when the first energy prices hit in the first day of the government, because of the previous government's inaction, that actually this is about coal and gas and about elevated prices right around the world for both coal and gas. That is true, of course, there are different levers available for both. That underlines the complexity of the challenge and why we are working so carefully to make sure we get the policy response correct.

KIERAN GILBERT: And finally, Peter Dutton says that nuclear small scale modular reactors needs to be looked at. He said in his budget reply France, South Korea, Japan, Canada, among others, are investing in next generation zero emission small modular reactors. Other nations are, why shouldn't we at least look at the technology?

CHRIS BOWEN: SMR - someday, may be reality. I mean, if Peter Dutton really wants to bank Australia's energy policy put all his energy policy on this science fiction pipe dream that somehow Australia could have small modular reactors everywhere, 80 of them around Australia. He's entitled to do that. We'll be taking that debate on front and centre. If he thinks the answer to high energy prices is the most expensive form of energy, he's entitled to that fantasy. But it's not one that should be foisted on the Australian people without a proper argument. He'll be getting that argument. If he wants to go down that road, that's fine. He'll need 80 of those spread around the country. He's going to have to explain exactly where they go. He can't have his yellow cake and eat it, too. He's going to have to tell the Australian people before the election where he would put the small modular reactors. He'd have to explain the price impact of the most expensive form of energy available at the moment, which is nuclear energy.

Even the Howard government Switkowski Report acknowledged that given that nuclear energy is the most expensive form of energy, it would be more expensive in Australia because we're starting from scratch. I mean, we don't make nuclear fuel rods in Australia, for example. It would be absolutely unfeasible and unrealistic. Peter Dutton's decided to bank all his energy policy on that. He says he wants a chat with the Australian people about it. Okay, let's have a chat, Peter. Explain where the small modular reactors will go. Explain why you want the most expensive form of energy it is someday, maybe reality. It's not small modular reactors.

KIERAN GILBERT: Minister for Climate Change and Energy, Chris Bowen. Appreciate your time. Thanks.

CHRIS BOWEN: Good on you, Kieran.