Interview with Sarah Ferguson, 7.30

SARAH FERGUSON: Chris Bowen, welcome to 7:30.

CHRIS BOWEN: Glad to be back, Sarah.

SARAH FERGUSON: Now you can campaigned on a promise of lowering electricity prices by 2025. Are you prepared to repeat that commitment and promise here? 

CHRIS BOWEN: Certainly. We were elected with a mandate to increase the proportion of renewables in our electricity grid because that's better for emissions and better for bills and we're 100 per cent committed to doing that. And yes, the modelling showed the impact of that policy by 2025. Yes, of course we are dealing with very difficult international circumstances, but we're not walking away from the agenda on which we're elected.

SARAH FERGUSON: That's the agenda. What about the commitment to lower prices by 2025?

CHRIS BOWEN: Well, as I said, we're not walking away from our commitment to get more renewables into the system. And yes, they are the cheapest form of energy available, the cheapest form of energy that's ever been available. And that does mean that power prices will be lower than they otherwise would be. Absolutely.

SARAH FERGUSON: How many households do you estimate will not receive power bill relief?

CHRIS BOWEN: The power bill relief that we put through last year, which had two parts, of course, the coal and gas caps, which applies to everyone, that flows through every single energy user in Australia, whether they be households or businesses. So, the answer to that part is none, because that applies to everyone. In terms of the rebates that we've negotiated with the states, they apply to around 5 million households across the country.

SARAH FERGUSON: How many households does that leave out? I mean, how many households are going to be struggling with these new high prices without the benefit of rebates?

CHRIS BOWEN: Well, those rebates are targeted to those who need it the most. It's a means-tested rebate which has been negotiated on a state-by-state basis or jurisdiction-by-jurisdiction. And that has taken what would have been increases of around 50 per cent to, in some jurisdictions, actual bill decreases, actual bill cuts, which we are delivering. In other cases, much smaller bill increases. Yes, it doesn't apply to everyone. The coal and gas caps do apply to everyone. I mean, that has reduced power prices compared to what they would have been for every single Australian. We were opposed in doing that in the House of Representatives and the Senate. That was a controversial move, but it was an absolutely essential one. So, that has delivered real relief to everyone. We recognise there's more to do. It's a short term plan, we also have medium and longer term plans to take the pressure off bills as well.

SARAH FERGUSON: Let's talk about that group of people, it's a very large group of, let's say, middle Australians, we're talking about a $500 to $1,000 increase in energy costs for people who are already struggling with cost pressures. Now, the Labor Government came to power with broad support from middle Australia. How much is this going to hurt you politically?

CHRIS BOWEN: Well, I'm not a political commentator, Sarah, I'm a policymaker.

SARAH FERGUSON: No, but you are a politician as well as a policymaker.

CHRIS BOWEN: Well, yes, that is undeniable, that is absolutely true, but I'm primarily a policymaker not a commentator and it's my job to put the right policies before the government and the Parliament and the people, and that's exactly the job I'm getting on with doing. So, yes, there'll be all sorts of free commentary from an opposition that took four gigawatts of dispatchable power out of the system and only put 1 gigawatt on, which has led to, in no small measure, a lot of the pressures we're dealing with now.

But to your question about the politics, Sarah, I think many Australians look at this and know that the previous government left a mess, that there were 22 failed energy policies. They know that energy prices are under pressure right around the world, but they see a government being honest about it. But we've also taken action with the intervention that we brought about last year, which was a very substantial and controversial intervention, but was absolutely necessary for all the reasons you're correctly identifying. And then our medium term plans to give more people access to renewables and energy efficiency with our $1.7 billion package, energy savings package. And, of course, our plan to take renewables to 82 per cent of the grid, which is great for the climate and great for bills as well.

SARAH FERGUSON: Can you forecast a time when power prices will start to come down?

CHRIS BOWEN: Well, of course, power prices are fluctuating internationally. There's a lot of pressure coming out of Europe at the moment. There's a lot of changes in the European situation with the war in Ukraine, which we're monitoring closely. And we'll provide further updates, of course, on that as we can. But very clearly, the policy agenda indicates getting more renewables into the system, backed up by storage and by firming, which is absolutely essential, is the best way of seeing the cheapest possible energy prices in very difficult international circumstances.

SARAH FERGUSON: Does that mean that we should gear ourselves up for future price rises, further price rises?

CHRIS BOWEN: Well, let's see what happens in Ukraine and Russia. Let's see what happens across the board. Clearly, as we've said, we acknowledge that we all will need to continue to work with Australians to take the pressure off power price rises through our short term interventions that we've done, and also through more medium and longer term.

SARAH FERGUSON: Let's talk practically, how can families best protect themselves against these rising prices? What should they do?

CHRIS BOWEN: I think families are doing that. I mean, we recognise the pressure that's on families with cost of living, not just on energy prices, but across the board. There's all sorts of pressure on Australian families. We know that very, very acutely. I think families are making those sorts of decisions. I know the demand for solar is absolutely massive. You can reduce your power bill very substantially by putting solar panels on your roof. Batteries are very expensive -

SARAH FERGUSON: That's assuming you've got the money to put those panels on your roof. 

CHRIS BOWEN: Of course.

SARAH FERGUSON: Let's talk about those people. We're talking about facing those increases now without the capacity to move to solar in the short term. What advice do you have for them in the short term?

CHRIS BOWEN: Well, I'm running through the options that you asked me about, Sarah, which is what options are available to families. And, yes, things like solar panels and batteries are a big cost, but there is also support there through our $1.7 billion energy savings package. A number of firms are very active in providing no interest loans or very low interest loans to do that. It's not everybody's answer, but it's a very important part of the mix. Of course, families are looking at all sorts of decisions to reduce their energy costs. Energy efficiency is very important. Again, that's part of our household energy savings plan. For small business we've got a 20 per cent tax discount for investments which applied from last weekend, applied from 1 July to enable businesses to make those investments to reduce their power prices. So, yes, there are plenty of challenges. We recognise very clearly and feel very deeply the acute challenges in cost of living. That's why we've put so many measures in place.

SARAH FERGUSON: You're finalising a new code of conduct for gas producers this week. Is business being reasonable when it says this new code could threaten their long term business interests?

CHRIS BOWEN: Well, with respect, I don't think that's what industry says about the code that we've put out. In fact, we've had indicative indications of a 260 petajoule increase in gas supply because of the very careful way we've designed it. Of course, some in the sector would prefer no government intervention whatsoever. We have a very firm view that Australians have a right to access affordable gas from under Australian soil and seas at an affordable rate. So, the code of conduct is a necessary intervention, but we've designed it very carefully. Hence we've seen that indicative supply increase of 260 petajoules. 

SARAH FERGUSON: However, I'll just quote one person here, Ian Davies, the Chief Executive of Senex, said that it could lead to the breaking of LNG export contracts. Is that reasonable? Is that really something that's possible under the code of conduct?

CHRIS BOWEN: No, we've been very clear. We've worked very closely with our trading partners. We work very closely with big gas users as well as the producers to ensure we get the balance right. We have international obligations as exporters. Some have criticised us for doing too much consultation on it. I reject that criticism. Well, in one sense, I accept it, I suppose. I accept we did a lot of consultation, but that's as it should be. And I'm very pleased with the response which has seen that increase in domestic supply indicated 260 petajoules.

SARAH FERGUSON: I just want to ask you this, is the government considering offering incentives to households who switch from gas to electricity?

CHRIS BOWEN: Well, what we've got - what we've already done, Sarah, is our $1.7 billion energy savings plan, which enables households to make those sorts of decisions themselves. We're not going to mandate, you shall do this or you must do that.

SARAH FERGUSON: No, but is there any possibility that you would consider offering incentives to households who need to change an appliance?

CHRIS BOWEN: Well, what we've done, through the $1.7 billion program, $1 billion through CEFC to enable financial institutions to help families make the decisions themselves. 300 million for public housing to make that more renewable and energy efficient, 100 million for local government to help them on their journey, and the 20 per cent tax reduction for small businesses. So, we've already done it, Sarah. We've already provided those opportunities. But what we're doing is enabling families and businesses and local governments to make those choices themselves, but to make them more financially viable choices.

SARAH FERGUSON: Chris Bowen, thank you very much indeed for joining us.

CHRIS BOWEN: Always a pleasure, Sarah.