Interview with Patricia Karevelas, ABC RN Breakfast

PATRICIA KARVELAS, HOST: By now I know you've all heard the news that your electricity bill is set to go up by 50% in the next two years. There have been calls from politicians across the spectrum from the Greens, to even the Liberal Party, for the government to intervene. Yesterday on RN Breakfast Treasurer Jim Chalmers said he was considering his options.

JIM CHALMERS: We’re empowering the regulators to do some of the heavy lifting here. But we've said repeatedly during the course of the week, that if further steps need to be considered, they will be considered.

KARVELAS: Energy ministers from across the country are set to meet in Melbourne today. Chris Bowen is the Federal Minister for Energy and Climate Change. And our guest this morning. Minister, welcome.

CHRIS BOWEN, CLIMATE CHANGE AND ENERGY MINISTER: Great to be with you Patricia.

KARVELAS: Jim Chalmers says the government is considering further steps to bring down energy costs, what exactly are you looking at?

BOWEN: Well, we'll be looking at all sensible options together with our state and territory colleagues. And of course, we're already doing that. You mentioned the 50% rise, of course, some of that has already occurred, and it was the rise that the previous government hid before the last election. But there is ongoing pressure on energy prices, in the short term caused by the ongoing European volatility and, frankly, the deliberate decision of Vladimir Putin to weaponise energy prices to try and make consumers in the West pay as part of his geopolitical strategy. Now, I like to look at this in two ways Patricia. There's the medium and longer term, in which of course, the obvious course of action is to continue with drive towards more renewable energy, and storage and transmission, because it's good for emissions and the cheapest form of energy by far. And call me old fashioned, but I think the answer to higher prices is to produce more of the cheaper form of energy, cheapest form of energy together with transmission and storage to go with it. But to be very clear, in the short term, the world, including Australia, faces ongoing pressure. And of course, our federal government isn't going to sit by and watch that just simply flow through the households. We will consider, carefully and methodically and in consultation with my state and territory colleagues, but we will consider careful interventions to ensure that the energy market is working as best as it can for Australian consumers industrial and residential, in light of these very real and significant international pressures, which were being very upfront and honest.

KARVELAS: And what would these interventions mean that households and businesses won't see their electricity bills go up by 50% in the next two years? Or is that price rise inevitable?

BOWEN: Well, as I said, that 20% is already occurring. That was the price rise that the previous government hid before the election by changing the law to delay the annual reporting of the default market offer. So that's already banked. And of course, those pressures are continuing. But of course, what we will do and are doing and, you know, that process is continuing, as you would expect, in a very careful way across the government with me working very, very closely with Jim, with Ed Husic, Madeleine King, and the Prime Minister, and other ministers on appropriate and careful consideration. And of course, I've already been having those conversations with my state and territory colleagues. I must say, Patricia, the relationship between myself and my state and territory energy ministers, is in very, very good nick, in very good working order, working very closely on those medium and longer term changes, transitions, which you and I was talking about last week, those big investments. But we'll continue to talk about short term as well, because there's a role for all governments and the most important thing for us to ensure is that our actions are working in tandem, and complimentary to each other. Obviously, we'll be ensuring at a federal level that our energy policy actions are working in tandem with anything the Reserve Bank is concerned about at the time. That's the process that is well underway, in the light of the ongoing and the updated advice from our energy regulators and operator which we receive on a very regular basis.

KARVELAS: Ok, we’ve got five minutes to the news and I've got a couple of really specific questions. Former ACCC boss Rod Sims says the energy price crisis could be solved if you threatened gas companies with limits on how much they can export. Should gas companies be forced to keep more product here at home?

BOWEN: Well, with respect to Mr Sims, I don't think there's any one single policy lever that you could just very easily pull. But yes, obviously, we have been talking to the gas companies about their obligations. We've negotiated a new Heads of Agreement, which has seen a material increase in supplier guarantee to the domestic market. But as I think I said on your show last week, as we've said consistently, we are very clear that there is more to do in relation to the gas market. And gas, I want to say Patricia, is part of the issue. It's not the only issue. We also have very elevated coal prices. We've got pressures all through the system. As I said, in the medium long term, the answer is to move to the cheapest form of energy, which can't be interrupted by geopolitical prices and that is renewables.

KARVELAS: But Madeleine King recently signed that Heads of Agreement. Why didn't you do it then?

BOWEN: Well, this is an ongoing process.

KARVELAS: With respect to have the chance you knew things were going up, why not then?

BOWEN: Well Patricia, we are going through an ongoing process. If you're criticising us for signing the Heads of Agreement too quickly while we're working on other things. Okay, that's your right. I respectfully disagree.

KARVELAS: I just wonder why there wasn't a price element in this. It was about supply, not price, price is the issue.

BOWEN: Supply and price are linked.

KARVELAS: They’re linked but there's no price trigger, yet. You've known this is coming.

BOWEN: Correct. The price trigger is not built into the existing mechanism that the previous government wrote. I’ve always acknowledged that. To be fair to the previous government, it was written for a different circumstance. We have outlined a process in relation to code of conduct. As I said Patricia, the gas price is part of it, of course it is. But there are other pressures in the system, we have elevated energy prices with coal and gas all around the world, flowing through to energy bills, you can deny that if you're, say an opposition, or you can acknowledge it, honestly, through government, and you can have a proper and clear and methodical process in place to deal with it. That's what we’re doing.

KARVELAS: The International Energy Agency has released its outlook for 2022. It suggests the war in Ukraine changed the market forever. If that's the case, what does that mean for a country like Australia? How do we move forward? What is the change forever? Do you see it that way?

BOWEN: The IEA I work very closely and Fatih Birol and his senior team, several of whom are Australians. I agree with him. And he also makes the point that the most important thing we can do is the transition to clean energy. I mean, in that report you just quoted, there are a range of very strong quotes, saying that anybody who blames clean energy for this crisis is dishonest, is avoiding the issue of the impact of the war in Ukraine and Vladimir Putin’s deliberate elevation of energy prices. Yes, the International Energy Agency is correct to point to those issues, and they are correct to point to the assertion. And in the medium and long term, the best thing we can do is engineer a more orderly and quicker transition to renewables, which is what we've been doing since May and what we'll continue to do.

KARVELAS: The New South Wales Treasurer and Energy Minister Matt Kean says he's going to use today's meeting with you to demand relief for households. Will you have anything to offer?

BOWEN: Well, I've already been talking to all my state and territory colleagues over the last 24 hours, as we do regularly. As I said, Patricia, we want to make sure, I made this point to my colleagues and they agree with me, we've got to make sure all our actions are complimentary. There's no point the Commonwealth going off and doing something if it's contradicted by something a state does and vice versa. We've agreed to keep in close contact, in relation to particular ideas. As I said, one of our policy objectives at the federal level is to ensure that anything we do is working in tandem with the Reserve Bank's concerns about the economy. I want to deal with the causes, not symptoms. If at all possible. I think that is a key criteria for us. Careful consideration of what is causing, what is causing these elevated prices is the best one.

KARVELAS: Okay, we've got 30 seconds left to the news. So this is the question, how quickly will you have a mechanism, a solution? Because we know that this is an urgent problem is this now within weeks?

BOWEN: Not a day longer than it would take for us to be sure that the policy settings are right, not a day earlier than we need to ensure that the policy settings are right, Patricia. We're working on this at a considerable pace. But under this government, you don't have sort of knee jerk reactions or 22 energy policies, you have careful consideration.

KARVELAS: Ok, we’re out of time. Chris Bowen, the Minister for Energy and Climate Change. Thanks for your time.