Interview with Patricia Karvelas, ABC Afternoon Briefing

PATRICIA KARVELAS: Chris Bowen, welcome.

CHRIS BOWEN: Good to be with you, PK.

PATRICIA KARVELAS: Will the free subsidy bring down prices across the board?

CHRIS BOWEN: It'll help. Obviously, it'll help those Australians who are in a position to take it up.

PATRICIA KARVELAS: Yeah.

CHRIS BOWEN: If you think about someone working from home, who's at home in the middle of the day, who can put on the washing machine, the dishwasher, knowing it's free, or a retired pensioner couple maybe, or even these days we have people with apps who can set their appliances to work in the middle of the day. But also the rest of us. Because if you've got people shifting energy use from the evening to the day that's less calling on the grid when coal and gas are dominating at night time - they're the most expensive forms of energy - that helps us move the load to when power is the cheapest. That helps absolutely everyone.

PATRICIA KARVELAS: So just to be clear, if you're not getting the free power because you're working, you don't have an app and you can't… 

CHRIS BOWEN: [Talks over] It’s just not right for you, yeah.

PATRICIA KARVELAS: …will you see your power prices lowered over time?

CHRIS BOWEN: Well, I'm not making any particular claims about this policy being a magic bullet. I am saying it will help. It's one of the many things that will help- 

PATRICIA KARVELAS: [Interrupts] But do you have modelling to show that it will broadly decrease prices?

CHRIS BOWEN: [Talks over] The advice to me, the advice to me from my Department and the Australian Energy Regulator is it helps as part of the broad suite of measures-

PATRICIA KARVELAS: [Interrupts] Not just for those hours but overall?

CHRIS BOWEN: [Talks over] No, no, overall. That's right. Again, I'm being careful not to over-claim and I want to be crystal clear…

PATRICIA KARVELAS: [Talks over] I can see that, so let me help. That advice, has it been specific or is it just the vibe?

CHRIS BOWEN: Well, it depends how many people take it up, obviously. You know how it rolls out, and we're starting in three states, that's where we have the power. We’d like to roll it out across the country 12 months later in consultation with those states - that will take a bit of time to build up. There are a few energy companies that already offer things like this, that's great, but we want to see it more broadly available.
And it won't be for everyone. But I want to make sure that consumers for whom it benefits are able to take it up and, again, I will say it will help with the broader challenges. As does, for example, our now 110,000 cheaper home batteries. Similar story. If you've got someone who's put in a battery and they're not calling on the grid at night or not calling as much, that's great for them, their bill will go through the floor. But it helps the rest of us as well because it's less calling on the grid.

PATRICIA KARVELAS: In terms of the way it works, let's just say hypothetically - because you don't know what the take-up will be - but that almost everyone wants to take it up. I mean, why wouldn't they, right?

CHRIS BOWEN: I hope it's attractive for a lot of people, sure.

PATRICIA KARVELAS: Well, free power is attractive. It can't not be.

CHRIS BOWEN: Yeah.

PATRICIA KARVELAS: Is it sustainable if it gets that high level of uptake?

CHRIS BOWEN: [Talks over] Yeah, because we have so much- the reason we can do this, PK, is because we have so much rooftop solar, 4.2 million Australian houses. We have so much electricity in the middle of the day. And if it's not sunny in Sydney, it's sunny in Melbourne or Brisbane, and we're one East Coast grid and a big grid in Western Australia as well. So, that is very consistently the case now. It's only because of our transition that we're able to do this because there is so much solar in the system.

Now, that is a challenge to the operator in some regards, just having so much energy in the middle of the day, but it's also a massive opportunity. And again, if you can shift a percentage of stuff that would happen in the night time, someone gets home from work and puts the washing machine on, if they can come up with a system and doing that in the day, they don't get charged and we're all better off because they're not doing it at night.

PATRICIA KARVELAS: Electricity retailers have said that you didn't consult properly over the announcement.

CHRIS BOWEN: That's not correct. But let me make a couple of points. Firstly, our announcement is- 

PATRICIA KARVELAS: [Talks over] They have-

CHRIS BOWEN: [Talks over] No, I'm not saying- I'm not saying some haven't – there is one person. 

PATRICIA KARVELAS: [Talks over] Right, I get it. So you're saying you dispute this claim?

CHRIS BOWEN: Well, let me just run you through the facts. We announced in June that we were going to start this consultation process about DMO reform. There's been a consultation paper issued by my department, discussions with key players in the energy system after that, advice to me. What we are now doing is consulting on the implementation details, both my department issuing a discussion paper and the Australian Energy Regulator issuing, as she normally does, a discussion paper about next year's DMO, but on this occasion, including how this will work.
So this is an important milestone in implementing this. We run a very consultative, I run in particular, a very consultative portfolio - we talk issues through. It doesn't mean everyone's going to be happy. And I do put consumers first. Maybe not every energy company loves this. So I'm pretty careful not to publicly get into a slinging match with energy companies because a lot of them are doing their best in difficult circumstances. But I put consumers first, and this is a pro-consumer reform. It's not a pro-company reform.

PATRICIA KARVELAS: And is this in response to really high electricity prices that you know people are struggling and that you're trying to address?

CHRIS BOWEN: It's in response to what we've always said, is that there's going to be more to do. But there are great opportunities.

PATRICIA KARVELAS: But is it? I mean, you've had a political problem as well, there's no doubt about it. The people are frustrated by consistently high energy bills.

CHRIS BOWEN: [Talks over] It's in response to an opportunity to help people with energy costs - absolutely no question.

PATRICIA KARVELAS: Yeah, and because you acknowledge that there's been a grumpiness, right?

CHRIS BOWEN: Well, I acknowledge that prices are higher than we'd like, and that's why we look at every opportunity. The DMO was set up by the previous government, I think in 2017 from memory. Things have moved on from then. Things have changed a bit. I'm not particularly critical of the way they set it up. I just- these years later, opportunity to have another look and do it a bit better.

PATRICIA KARVELAS: Is this also part of your way of weaning the public off those energy subsidies that are ending at the end of the year?

CHRIS BOWEN: I wouldn't explicitly link the two.

PATRICIA KARVELAS: No?

CHRIS BOWEN: We're doing this because the time is right.

PATRICIA KARVELAS: But they are both about energy prices, right?

CHRIS BOWEN: Of course, but I'm not- you’ve asked me…

PATRICIA KARVELAS: [Talks over] But is it like, well, you get this because we're going to get rid of the energy?

CHRIS BOWEN: You asked me if there's an explicit link? No, I don't believe so.

PATRICIA KARVELAS: Do you think you should be looking at extending those energy subsidies then?

CHRIS BOWEN: Well, we always look at these things budget by budget and- but I don't think that energy bill rebates are only bow in the armour, as I'm showing, by doing this as well.

PATRICIA KARVELAS: So when Ken Henry told my colleague David Speers that you've got a problem if that's built into your architecture, do you agree with that?

CHRIS BOWEN: The Treasurer's made clear, and I agree with him, this was never meant to go forever, I think was the words the Treasurer used, and obviously that's correct.

PATRICIA KARVELAS: Yeah. Look, I just want to move to another issue. There are reports that the Government is looking at this new East Coast gas policy you're imminently going to be announcing. Can you just talk to me about what your plans are around when that will be announced and if it's going to impact your ability to meet emissions targets?

CHRIS BOWEN: It won't impact on our ability to meet emissions targets because we've always said that we will need gas in the system, whether it's for gas-fired power –

PATRICIA KARVELAS: [Interrupts] You're going to be accelerating the amount of gas in the system, right?

CHRIS BOWEN: Well, what we're going to be doing is ensuring Australians get access to gas for the purposes they need. Australians, 5 million Australians use gas for home heating, heavy industry uses gas, and gas-fired power stations are an important support for renewables because they're very flexible, unlike coal-fired power stations, which companies are working on making more flexible, but there's a long way to go. Gas-fired power can be turned on and off at two minutes' notice. So you can turn on a gas-fired power station maybe at seven o'clock at night when the grid needs a bit of extra support, turn it off at midnight maybe when people have gone to bed and there's no emissions for the rest of the day. That's the benefit of gas for the system. But we need to ensure the supply of gas for those purposes, heavy industries I said included, as gas from the Bass Strait is depleting. We are getting a lot- I'm not sure many Australians have sort of focused on this issue, getting a lot less gas from the Bass Strait than we used to. So what we're about is- what Madeleine King and I are working extremely closely together on, and it's an advanced process but we've not finished our deliberations yet, is how can we take what have been- responses that we've had to do and sometimes in a time-constrained circumstance with gas shortages and issues emerging, how can we take a more holistic approach? That's what we're doing, reconsidering…

PATRICIA KARVELAS: [Talks over] But if you end up increasing the amount of gas in the system, which is ultimately what you're doing – 

CHRIS BOWEN: [Interrupts] Well, no, I wouldn't- no, I don't see it that way, PK.

PATRICIA KARVELAS: [Talks over] No?

CHRIS BOWEN: It's about- it’s not about –

PATRICIA KARVELAS: [Talks over] Doesn’t that have an impact, because it's not- it's a fossil fuel.

CHRIS BOWEN: [Talks over] The amount- the amount of gas...

PATRICIA KARVELAS: [Talks over] Doesn't that have an impact on your emissions and your transition?

CHRIS BOWEN: [Talks over] No, with respect, that's not what we're doing. We're not increasing or decreasing the amount of gas in the system. We're making sure Australians get access to the gas necessary, not more, not less.

PATRICIA KARVELAS: Well, that has to be more, by logic.

CHRIS BOWEN: No, I think- with respect, I think you're conflating supply and demand. The demand will determine how much gas we use, right? What we're doing is ensuring there's enough supply for that demand. Now, we'll work with companies – 

PATRICIA KARVELAS: [Interrupts] And it’s about lowering prices too, right?

CHRIS BOWEN: We'll work with companies that want to electrify. We're partnering on some of that. There are state government programmes to electrify houses in some instances, Victoria and the ACT most particularly. All that's great stuff. But we're always- also always been consistent, we are still going to need gas in the system and we're a large gas exporter but we also need our own gas. How do we make sure that Australians get proper and fair access to the gas that's under our soil? That's what Madeleine King and I are 100 per cent of the same mind on and working together on.

PATRICIA KARVELAS: You want to bring COP to Adelaide, as we know. Is it salvageable? Is the Prime Minister going to go at the end of the week?

CHRIS BOWEN: We’re- look, I'm not going to give you a blow-by-blow description other than to say the support for our bid is overwhelmingly strong around the world. The world wants us to host COP, and that's a great thing. But the COP processes aren’t as I would have designed them in a perfect world where you've got to get a consensus, which effectively means unanimous, which means that Turkiye, with whom we respectfully competed against, also has to agree.

PATRICIA KARVELAS: [Talks over] Yes, you've got to do a deal with Turkiye, right?

CHRIS BOWEN: So that’s a little bit of a complicated process and I’ve been in discussion with my ministerial counterpart. At the other levels, Prime Minister to President, Foreign Minister to Foreign Minister, there's also been discussions. That's a good government doing its job. Those discussions continue. When we're in a position to say more, we will.

PATRICIA KARVELAS: Okay, just finally, the Reserve Bank Governor Michele Bullock says anything is possible. We might even end up with a rate rise. Does that worry you?

CHRIS BOWEN: Look, I'm not going to comment on what the independent Governor of the Reserve Bank says, other than to say I'm glad that inflation was running at 6.1 per cent when we came to office and rising and now...

PATRICIA KARVELAS: [Talks over] Sure, sure, but it did go up and there's no rate relief. In an electorate like yours, people want rate cuts.

CHRIS BOWEN: [Talks over] Of course, of course.

PATRICIA KARVELAS: So if anything is possible and there could even be a rate rise on the horizon, you'd have to be concerned.

CHRIS BOWEN: The last few rate cuts have been very welcome in my community, as you'd expect in communities across the country. That's why we've worked so hard to get inflation under control after the absolute bin fire of inflation, six per cent we inherited. The Treasurer has played an absolute blinder halving that. That's a good thing. But he would say, if he were here, more work to do, and that's the work that he's focused on.

PATRICIA KARVELAS: Chris Bowen, thanks for coming in.

CHRIS BOWEN: Good on you, Patricia.