Interview with Sarah Ferguson, ABC 730

SARAH FERGUSON: Chris Bowen, welcome.

CHRIS BOWEN: Great to be with you, Sarah.

SARAH FERGUSON: High electricity prices and the impact of those prices are having on inflation is really the Achilles heel of this Government. When can you promise relief for households and businesses?

CHRIS BOWEN: Well, prices are much higher than I would like, they're too high. I'm pleased that we've seen a substantial reduction in wholesale prices, around a third just in the last quarter, so wholesale prices are really tumbling. Now, what I want to see, obviously, is as much of that as possible flow through to retail prices as soon as possible.

SARAH FERGUSON: Can you give any guarantee that drop in the wholesale price of electricity will be passed on to consumers in the New Year?

CHRIS BOWEN: Well, I think the key for Government is to ensure that our regulatory settings are fit for purpose, to make sure that as much of that flows through s possible. Wholesale prices are only about a third of bills so we've got work to do to make sure that that flows through as well as possible, but it's a third of bills where Government policies have the biggest impact.

And it's no coincidence, Sarah, that, as we've seen, record renewables, you know, October being the first month in Australian history that we've got half of our electricity from renewables, and that's coinciding with a tumbling of wholesale prices. That's no coincidence, because renewables are the cheapest form of energy. But of course, I understand that, as we speak, Australians sitting around the dinner table haven't yet seen that reflected in their bills.

SARAH FERGUSON: Now of course, you have a history with making promises about prices - that they were going to come down, they didn't come down. Is it now just too politically risky for you to make promises about power bills coming down?

CHRIS BOWEN: I think it's fair to say, Sarah, that we released modelling in 2021 before the invasion of the Ukraine - it's fair to say that we acknowledge that there are some circumstances out of our control and that-

SARAH FERGUSON: Does that mean that you've learnt a painful lesson from that promise - not to make promises like that?

CHRIS BOWEN: Well, I'm just making the point, Sarah, that as a Government we're very, very careful. We can point to different people like the Treasury and the Australian Energy Market Commission who both pointed to prices coming down, but they are economic indicators and modelling, they’re not political promises-

SARAH FERGUSON: -It’s not what Australians heard.

CHRIS BOWEN: But I'm making the point that we're not making that promise. What we are doing, we can do, will do, is point to all the evidence that renewables are the cheapest form of energy. The faster and better we get that renewable energy rolled out, the cheaper bills will be.

SARAH FERGUSON: Let's just stay with bills for the moment if I can. If those lower prices that we’re seeing in the wholesale price of electricity do not get passed on to the consumers, despite all the efforts you say you're going to make, will the Government extend energy bill relief for suffering people, households, businesses?

CHRIS BOWEN: We look at those matters budget by budget. Now what we are doing though is making sure that our regulatory system is fit for purpose. 

The Government has introduced Solar Sharer for example, which requires three hours free power in the middle of the day because we have so much solar energy. We're rolling out cheaper home batteries that's - as we speak today - 138,000 households have put in Cheaper Home Batteries. These are the sorts of things we can do - practical action, 138,000, Sarah, since 1 July, an extraordinary figure. 

A lot of those people will go from having a bill to a rebate, or at the very least can reduce their bills by 90 per cent if they put solar panels and batteries on at the same time. So, these are practical reforms that we are implementing to help people.

SARAH FERGUSON: Let me just come back to that bill question, because if we're in a situation the New Year when those, the prices of people's power bills are not coming down, there's going to be a clamouring call for more power, for more bill relief. Are you ruling it out?

CHRIS BOWEN: Well, just as I indicated, we consider those matters budget by budget, with all the evidence in front of us. Now we've had one quarter where wholesale prices have tumbled by about a third. Now, one quarter doesn't mean the job's done, so we have to keep going to ensure that the cheapest, most reliable, lowest emissions form of energy, renewables, is rolled out as quickly as we can. And that's what we're doing.

Now I know you haven't asked me about the Opposition, but the fact of the matter is there’s a choice. We have the policy suite which is putting downward pressure on prices, they’ve taken policy decisions which would increase prices. So that's a debate that will roll out between now and the next election, and a debate we’re happy to have.

SARAH FERGUSON: Does the impact of these energy prices - where they sit now, we don't know what's going to happen into the New Year - given those prices and the impact on inflation, and notwithstanding we had a survey from the ANU today saying that the Government had taken over the mantle of the better economic manager - but does this issue of the power bills being so elevated this year and perhaps into the New Year give the Opposition an open door into reclaiming that top position as better economic managers?

CHRIS BOWEN: Well, I don't see it through that prism, Sarah. Firstly, the reason to reduce energy bills is because that's what Australians need. The Opposition also said that they wanted the last election to be a referendum on energy and climate change. Okay. Those were big issues. The last election wasn't that long ago and the result was clear. Now, that doesn't mean that that debate finishes, but it does mean the Australian people told us pretty clearly, keep on going, and that's what we're doing.

SARAH FERGUSON: Are we in a position now where the success, really, of the Albanese Government is dependent on you bringing down those energy bills? Not to put too fine a point on it, but that's the question.

CHRIS BOWEN: Well, it's one of the many areas that we're working on and, yes, that's one of my clear responsibilities-

SARAH FERGUSON: It’s a bigger question; it's about the success and failure of the Albanese Government. If the Government cannot bring those power bills down, is that the threshold for success and failure?

CHRIS BOWEN: Well, a government is doing many things all at once. I'm a member of the Cabinet doing many, many things including, yes, one of my key jobs is to make sure that Australians are paying the lowest bills they can. 

The way to do that, in my very strong view, is to keep on going with rolling out renewable energy, both at household and grid levels. We're doing that, we're making good progress. And five gigawatts of new energy put on over the last year, that's actually a record. The more supply you have, the better that is for prices.

SARAH FERGUSON: Sure, but we've got energy bill relief running out very shortly, in a month's time. Is it in your mind now that we could be in a situation in the New Year when that's having to be extended, notwithstanding the news on inflation?

CHRIS BOWEN: All I can do is repeat my answer - that the Government takes those decisions fiscal event by fiscal event, that's a fancy way of saying budget by budget.

SARAH FERGUSON: Let me ask you a question about renewables. That's what you've been very keen to talk about. You make the case often, renewables are the cheapest form of energy in Australia. But the ever-increasing costs of building the transmission that needs to go with those renewables mean that power bills are going to remain elevated into the future. Is that just a fact need to be more clear about with the Australian public?

CHRIS BOWEN: Well, the fact is Sarah, a few points to make, if I could. We need more transmission lines not just because of renewables, we need more transmission lines. The grid had not been really in any substantial way added to for forty years. Someone had to fix it. So we've come along, and what we've said is this transmission needs to be built. 

Our policies enable it to be built as quickly and as cheaply as possible through our Rewiring the Nation fund. Transmission lines are always going to need to be built. Again, even at the last election, the Liberal Party still would have needed to build new transmission lines to get their nuclear energy around. You can’t-

SARAH FERGUSON: -but you know from AEMO that the forecasts are, that the costs of building that transmission system is going up by 25 to 55 per cent, I'm quoting them for overhead transmission 10 to 35 for substation projects. So let me just ask the question to you again. Renewables is the cheapest form of energy, but is it right that the cost of the transmission is going to mean that our power bills remain elevated into the future?

CHRIS BOWEN: Let me try the answer a different way if I could, it might satisfy you more. The transmission needs to be built anyway, regardless of the type of energy that's being generated, point one. 

Point two, even counting the cost of transmission, and yes, transmission costs money, and yes, like most infrastructure projects around the world, they're getting more expensive. No secret there. Even counting the cost of transmission and storage, renewables still comes out as the cheapest form of energy, so it's still the right call for the Australian economy and for bill payers to continue with renewables. 

The more we can do in households, by the way, of course, that's less need. The more batteries that go in, the more rooftops that put solar on, you know, that's energy that doesn't need big transmission lines, but we will still need new transmission lines regardless. It doesn't matter who the Minister is, who the government is, we're going to need transmission lines.

SARAH FERGUSON: Simple question. Is this giant, ambitious renewables project going to make our bills smaller or not?

CHRIS BOWEN: Well, because renewables are the cheapest form of energy, even including transmission, the answer to that is yes.

SARAH FERGUSON: There's a lot at stake here if you can't guarantee lower electrical prices in coming years. The narrative of a failed government will grow in the year ahead. How are you going to combat that?

CHRIS BOWEN: By facts. And by achievements. And by continuing. The fact of the matter is, the Liberal Party wants to sweat coal assets longer. To, I guess to their credit, they're honest about that. They want to keep coal-fired power running longer. It's the most unreliable part of our energy system. When coal goes down, your bills go up. And coal goes down a lot. Unplanned outages, coal-fired power stations breaking down. We've got them today. We'll have them tomorrow. 

As the Australian Energy Regulator has pointed out, that is the biggest driver of price spikes, is coal-fired power stations breaking down. I want to replace them, the Liberal Party wants to keep them. That's the choice. Now, do I need to keep saying that and engaging in that debate? You bet. Am I up for that? Absolutely. Because we've got the facts on our side.

SARAH FERGUSON: So you've described the energy transition, including on our program a number of times, as now, in fact, bigger in scale. You used to say as big as the Industrial Revolution. You’ve revised that upwards to bigger than the Industrial Revolution.

CHRIS BOWEN: In a faster time period.

SARAH FERGUSON: Yes. How can a transformation on that scale allow you time to be the COP negotiator?

CHRIS BOWEN: Look, the COP- I think, firstly, I think it's a good thing that Australia holds the negotiation presidency. It's more controversial than you might have imagined. 

I would have thought, even if you don't agree with everything the Government's doing, you would say, well, having an Australian chair at the negotiations is a good thing for our country. And we want to be- we want to see Australia having more influence internationally, not less. The Liberal Party was asked, Sussan Ley was asked, isn’t it a good thing that Australia leads these negotiations, and she said no. ‘No, that’s not good that we’re at the table.’

Now, in terms of time, it is by design a role to be held by a serving Cabinet Minister. Eight out of the last ten COP Presidents have been Ministers in their Cabinet with jobs similar to mine. Some have been climate ministers, some have been environment ministers, some have been foreign affairs ministers, one's been a Prime Minister. But they've done their day job. 

Of course, it's not a full-time Chief Executive role. It is the Chair of Negotiations. That is a role which would require me to go to COP, which I'll go to anyway. It will require me to go to pre-COP, which I will go to anyway. It is not a full-time job. It is a lie by Sussan Ley to say it's a full-time job. 

It is an honour, one that I’m glad to have been given. And I think we can really add value as a country, the first time that the negotiations will be shared by an Australian. I've got a great team working with me, both Josh Wilson and Kate Thwaites and my department of climate change negotiators. It's a good thing for Australia that we have more influence, not a bad thing.

SARAH FERGUSON: Chris Bowen, we'll talk again when we tick into the New Year and we see what happens with energy prices.

CHRIS BOWEN: Look forward to it.

SARAH FERGUSON: But in the meantime, thank you very much indeed.

CHRIS BOWEN: Have a great Christmas, Sarah.

SARAH FERGUSON: You too, thank you.