Press conference - Canberra

CHRIS BOWEN: Good afternoon. Last week the Prime Minister struck an agreement with Premiers Labor and Liberal, to act to shield Australians from the impact of the Ukraine war on energy prices. Today the Albanese Government struck an arrangement across the Parliament, to ensure our legislation has passage through the Parliament tomorrow. This is the Government of Australia acting in the national interest, working as a good government does, across the aisle with people of good faith and goodwill for a good outcome. That is what this government sets out to do, and it's what we deliver. The legislation we'll deliver tomorrow will ensure that the energy price rises we're seeing right around the world, and as the IEA has said, 90 per cent of them come from coal and gas prices which are a result of Putin's illegal war, have the sting taken out of the tail when it comes to Australians. Australian households, who can’t afford it. Australian industry, which would have been under enormous pressure if these price rises had been allowed to sail through without a response from the Australian government. So last week the Prime Minister thanked the Premiers, Labor and Liberal, for their cooperation. Today, on behalf of the government, of course, I thank the crossbench, people of goodwill and good faith, for working with the government to ensure that tomorrow this proposal becomes the law of the land. These are unprecedented and difficult times, and this is decisive action. It's our job to act in the national interest. I understand it's the job of CEOs in companies to protect their profits. It's our job to protect the people. It's our job to protect the country. These price rises were not brought about by the actions of Australian households or Australian industry. They were brought about by Vladimir Putin, and they were brought about by Australia being ill-prepared for such a crisis, because of 10 years of policy dysfunction. But we're fixing that across the board, getting on with the job, as we did also last week with the capacity mechanism, as we are with Rewiring the Nation and all the other reforms, which you well know. This is what mature sensible governments and grown-ups do. That's what the Albanese Government is. We'll continue to work every day to deliver better outcomes for the Australian people. That's exactly what the Prime Minister did last week, that's exactly what his government has done today, it's exactly what we'll do tomorrow. Questions. Phil.

JOURNALIST: The bill tomorrow will understandably include the appropriation of the one and a half billion for the household and business compensation. That doesn't start until April next year. Why is it necessary to put it in this bill other than to try and reach Peter Dutton?

CHRIS BOWEN: Well, because the Treasurer needs appropriate authorisation for the negotiations with the states.

JOURNALIST: Do it in February, or March, or?

CHRIS BOWEN: Well, we're here, sitting, we will do the whole job tomorrow.

JOURNALIST: Minister, how much have you promised to the Greens in next year's budget in exchange for their support?

CHRIS BOWEN: We've had a good conversation with Adam Bandt and the Greens, and what we've done, as he has outlined, we have agreed that we will develop in the lead-up to the May budget, a package to assist Australian households and businesses deal with the move to electrification and support them on that journey. Now, that will involve, inevitably, a role for the CEFC, a role for ARENA, we will develop that work. 

I'm not going anywhere; you'll all get a go. That is important work. Now, that work will be an early dividend, if you like, from the National Energy Performance Strategy, which we had already embarked upon. It was announced a couple of weeks ago by my Assistant Minister, Jenny McAllister, that we would be engaging in a process of consultation about the National Energy Performance Strategy, because this is well overdue work, well overdue work. And as I've said before, where we can find areas of agreement across the board with the crossbench, including the Greens, we will work together. Where there is a disagreement, no surprise there, we have areas of agreement, we agree that households and industries are moving to cheaper energy, often in a case for households, healthier energy, is a good thing. We've begun that work, we've undertaken that we'll deliver a substantial path in the lead-up to the May budget. That's the right thing to do. 

JOURNALIST: Just further on this question, did you give the Greens an assurance of a figure? They say it's quite a significant figure. 

CHRIS BOWEN: We agreed it would be a meaningful and substantial package, but obviously we'll work those issues through.

JOURNALIST: Minister, the Prime Minister and Madeleine King have both said that we should be looking at a national gas reservation policy. If that happens, how would that incorporate with WA existing reservation policy, or would it be separate? How would the gas get from WA to the East Coast, and also do you agree that there's nothing in the draft legislation that would stop companies gaining the gas market and selling at the capped price but then on selling at a higher price?

CHRIS BOWEN: Well, there's an anti-avoidance provision in the bill. In relation to gas reservations, I think the Prime Minister was making a statement of principle. With respect, I think you're getting - I don't mean to be aggressive - I think you're getting a bit ahead of yourself with, you know, implications of this or that. The gas reform package we're putting forward tomorrow, and then the mandatory code is substantial, and that is by far and away the focus of our work.

JOURNALIST: Economists have suggested that the package put forward by the government could actually just bring forward gas shortfalls in a few years' time that would have otherwise been further delayed or given time for other production to come online. Are you confident that that won't be the case? 

CHRIS BOWEN: Yeah, yeah. I mean this is a carefully calibrated package, in difficult times, in some ways, as I've said before, complicated, in some ways very simple. Gas was being sold last year, 96 per cent of the time, for less than $12. Companies were profitable, they weren't complaining, everything was okay. Thanks to the war in Ukraine, the price of gas has skyrocketed.

Now, that is not the fault of the factories in my electorate who rely on that gas, or the factories in Kingsford Smith or in Gellibrand, or anywhere else across Australia, who rely on that form of energy. That's not their fault. The cost of production hasn't gone up. I haven't heard anywhere gas companies claiming that the cost of production has gone up. They can make that level of profit offshore. We are not seeking to interfere with that. This is Australian gas. It is beneath Australian soil and Australians, I think, have a right to expect they'll pay a fair price for that gas, but not an exorbitant war price. That is what we are delivering tomorrow. So I understand, as I said before, the job of chief executives in companies to maximise their profits. It's our job to maximise the national interest.

JOURNALIST: Mr Bowen, the modelling that we've heard of so far suggests that prices will go up, they won't go up as much as previously thought, so in terms of taking the sting out of the tail, there's still a sting. The prices of electricity will go up for households 20 per cent in year one, 23 per cent in year two. So that's still a significant increase. What's your message for Australians who might be watching this or may be seeing the news tonight and might think, "Well, hang on, we" - as you say, it's Australian gas on Australian soil. You've taken this unprecedented action, hugely contentious, and you're still getting a 20 per cent increase in electricity, then a 23 per cent increase in electricity. Can you not do more? Are all those costs so built into the system now that you can't do better than that?

CHRIS BOWEN: So, David, I mean obviously we were on the latest figures expecting a 36 per cent increase next year, the coal and gas cap reduces that very substantially, down to 23, and then you add the rebates, and you get down again. We have never claimed, not once have we claimed that this is a magic bullet, or we'll see prices go down next year. And I challenge you, I know you're not asserting that, but for the sake of the argument –

JOURNALIST: I'm asking.

CHRIS BOWEN: I know, I understand, and I respect - just - I understand the question, I'm answering it. Nobody can point to anywhere, where the Prime Minister or Treasurer or I have said, ‘Hey, we're reducing energy prices magically in the next six months.’ I think Australians understand the international pressures primarily. Yes, there are some network costs and increase in interest rates, et cetera, which are there as well, and the Australian Energy Regulator has briefed us on those. But overwhelmingly, the pressure on Australian energy prices comes from the war in Ukraine. IEA says 90 percent around the world - overwhelmingly the AER, the Australian Energy Regulator and the Treasury and all the relevant agencies agree that the big impact on prices in Australia is coal and gas prices as a result of the war in Ukraine. The lever we have at our disposal most directly is to reduce those prices by the action we're taking tomorrow. That's what we're doing.

JOURNALIST: Just on your agreement with the Greens, like you've mentioned it's still subject to consultation and that sort of thing. Can you give us a broad idea of what you will actually be doing? I mean are we talking rebate, are we talking low interest loans, grants that sort of thing? And more broadly, I mean what did you say to gas companies, essentially the government's subsidising people to not use gas?

CHRIS BOWEN: Well, Josh, I'm not announcing the package today.

JOURNALIST: Sure.

CHRIS BOWEN: As I said, we've already begun work on the National Energy Performance Strategy. The Greens in very good faith have suggested that we commit to a package in the lead-up to the budget as part of the budget process, which is a suggestion that we accepted. Inevitably, there's some design elements, and further work to go. But to give you - I mentioned the CEFC. To give you an idea, for example, a couple of weeks ago I announced with CEFC that they would provide concessional loans to help people buy electric vehicles with very substantial savings. This becomes, frankly, more relevant as interest rates are going up. You know, a little while ago you might not have had the same impact because interest rates were so low across the board. With interest rates rising concessional ones can have a bigger impact. They certainly are, and will, with the $100 million CEFC electric vehicle commitment. So that sort of thing are things we will consider. But to be fair to us and the Greens, and everyone else, we're a methodical government who works issues through carefully, but these are some of the options that will be available to us as we develop the package. Jacob. 

JOURNALIST: Thanks, Minister. Just for the sake of clarity on how this works with the Code of Conduct, when does that Code of Conduct come into effect, and give the Minister the power to intervene in the market as it's laid out, and secondly, if every molecule is capped at $12 effectively – 

CHRIS BOWEN: For Australian use.

JOURNALIST: – when you have peak demand, how does the market function in terms of allocating where the gas goes? How are you deciding which customer get the gas first?

CHRIS BOWEN: Well, if you're talking about, there's a $12 cap, so the market still operates but with a $12 cap for the next 12 months. And then after that the Code, we propose comes into place.

JOURNALIST: So it's after the –

CHRIS BOWEN: You don't have a Code and a cap at the same time, right.

JOURNALIST: Right. 

CHRIS BOWEN: So once the cap has run its natural course, then the Code comes into place. We've said we'll consult on the details of the Code until February. I think that's appropriate. Clearly the cap is urgent, super urgent. The Code can be - there can be further consultations till February, and then, indeed there will be ongoing conversations no doubt with interested parties about some of the detail of design, and then that will apply after that. And basically, as we've said, the Code is about reasonable prices, and I think asking people for reasonable prices is a pretty reasonable thing. If you're asking for the right to charge unreasonably, that's an unreasonable thing. Phil, you've had a question. You've had a question, Jacob. Here, Dan.

JOURNALIST: Just on the ACT – David Pocock has said he'd like to see funding for a suburb wide electrification pilot here in Canberra to sort of demonstrate that it can be done. Is that something you're willing to consider either through the process you're doing ahead of the budget or separately?

CHRIS BOWEN: Again, I mean I thank Senator Pocock for his very strong engagement in support of the bill. He comes at these things in good faith, and I recognise that, as I do all the crossbench, including the Greens, with whom I've had the most detailed conversations, but David has raised that with me, and of course pilots and that sort of thing will be the sort of thing we would consider as we develop the strategy.

JOURNALIST: Minister, just on the coal compensation, you've already said that will take place in very, very rare circumstances. Obviously these are very large amounts of money we're talking about. What sort of idea of compensation are we looking at? There's been estimations of tens of millions of dollars.

CHRIS BOWEN: What we're looking at, in terms of direct compensation via - particularly in relation to New South Wales, so when I say direct, I mean with New South Wales. That's frankly at the request of New South Wales to ensure certainty of coal supply in the unusual event that cost of production is over $125 a tonne, which we in the New South Wales government agree would be a rare event, a rare event. Now, details obviously are still being worked through, but we would envisage that being a rare event.

JOURNALIST: Minister, just based on your earlier answer, can we gather that your preference in delivering the electrification of households is concessional loans, is that your priority at this stage and which households do you expect will benefit? Will it only be low and middle incomes, or could it be all Australians?

CHRIS BOWEN: Again, we're going to develop a strategy - I've talked about one example. I was trying to give Josh a full and frank answer about it and used an example. I think the role of CEFC will figure prominently in our considerations, but not exclusively, and I'm not announcing the strategy today. Clare.

JOURNALIST: Minister, given that the cap only lasts for 12 months, and it's entirely possible that the war would go for longer, are you confident that if that Code, however its final form is, will effectively carry on this attempt to keep prices low, and just to pick up on what you said before, can we get an answer on how the market would deal with peak demand, who would get what gas?

CHRIS BOWEN: Well, the market will operate as it does today.

JOURNALIST: Will people bid for – 

CHRIS BOWEN: Yeah, and then going forward, there will be a Code which will govern people's interactions. And again, what we're after under that Code is reasonable pricing. If people want to argue for the right to price unreasonably, I think that's a courageous argument to mount. I think that's a courageous argument to mount. Australian gas should be sold for reasonable and fair prices. While the cap is on, there will still be a market, but we're capping the prices, and as I said, there's anti-avoidance provisions, there's the ADGSM, which is available to the government, should the Minister for Resources feel the case is made, so that there are multiple options available to the government.

JOURNALIST: Minister, just on the opposition. They’ve been complaining that they haven’t received the legislation yet, have you been consulting with them throughout this process and why haven't they received it?

CHRIS BOWEN: I mean, give me a break. Seriously, the opposition. This was the Shadow Minister on Sunday, and I'm quoting. ‘The legislation that I read yesterday, yet to go through Shadow Cabinet, yet to go through the party room, I think is disaster, and it's a monster in the making, because we will fail in the short term,’ yada yada, et cetera, et cetera. So on Sunday they weren't voting for it because they'd seen the legislation and they didn't like it. This morning they're not voting for it because they haven't seen the legislation. I mean, pick your lane, guys. Pick your argument and stick to it. On Sunday they'd seen the legislation and didn't like it, today they haven't seen the legislation. I mean Peter Dutton came out and said this was a catastrophe before the press release had been issued from the National Cabinet. These guys are not constructive and not of good faith. They clearly - Peter Dutton - without going to Shadow Cabinet, without going to his party room, had made a decision and said this was a catastrophe. Okay. You've made yourself irrelevant to the process in that case. I mean this is not an opposition seeking to engage constructively in a difficult situation. We've just been through a health pandemic where we as the opposition engaged constructively, supported where we could, made suggestions where we should, et cetera. We're now going through an energy pandemic, and the Leader of the Opposition is playing cheap old-fashioned denial and delay politics, blaming renewables, you know, et cetera. They want to make themselves irrelevant, they've succeeded. Phil. I think everybody else - has everybody had a first question before I circle back to Phil? I'm nothing if not fair.

JOURNALIST: Just back on Jake's question about the Code of Conduct. It's 12 months away, it's complicated, the industry is warning of all sorts of unintended consequences. Why the rush to have it now nailed down by February?

CHRIS BOWEN: Well, I don't accept it's a rush, Phil. I mean here we are in December, we'll consult until February. As I said, no doubt there will be ongoing conversations. That's the way this government works. Our doors are open, we talk to people, we have formal consultations where people can make submissions, and we have ongoing conversations, and that's the way we work.

JOURNALIST: So you won't tweak it beyond February?

CHRIS BOWEN: I don't think it's a major announcement to say the government will continue to talk to people that are interested in how the Code's going to work. I reckon we've had a good go and we'll wrap it up. Thanks guys.