Interview with Ashleigh Gillon, Sky News

ASHLEIGH GILLON: Joining us now is the Assistant Climate Change and Energy Minister Jenny McAllister, really appreciate you making the time, thank you. What are you saying today to the roughly 600,000 Australians who thought they were voting for a government that would bring down power prices and are now today facing that news of this huge hike?

JENNY MCALLISTER: Well, today's announcement will be difficult news for consumers, and we knew this was coming. We have gone through a period of incredible volatility in international energy markets as a consequence of the war in Ukraine, an illegal and immoral war that's put enormous pressure globally on energy prices. And of course, in the Australian context, that is made more difficult by a decade of underinvestment in our energy system, a consequence of a Coalition Government that for ten years could not land an energy policy and brought enormous instability and underinvestment into our market. But today's announcement is really an indication of how important it was that the government intervened when we did last December to protect consumers from the worst consequences of those dynamics. 

You might remember that we were warned at that time that the price increases could be as much as 50 per cent. And Clare Savage, the AER head reiterated that this morning. Today's announcement is an indication of the steps that we took. It has taken the sting out of those prices, but of course we recognise that it remains difficult for consumers. We announced in the Budget, of course, targeted bill relief for some households, the households that need the most help. And for those households, we calculate that, actually, the effect of the rebate that will be applied to their bills over the second half of this year will offset the impact of these increases.

ASHLEIGH GILLON: So, you're comfortable with the decision the regulators made here? You mentioned the Australian Energy Regulator Chairwoman, Clare Savage, earlier. She said today she thinks the organisation struck the right balance between allowing retailer to recoup their costs and also protect consumers. Would you agree, it is really a good balance? And what are you expecting in terms of the flow on impact? I mean, the increase kicking in from July only adds more pressure on the RBA to increase interest rates, doesn't it?

JENNY MCALLISTER: Well, you might remember that the Treasury analysis is that the interventions we have made in the energy market in our Budget actually take pressure off inflation in the coming year. It's a really important feature of the Budget because we know that matters to the macroeconomy, but it matters most of all to households.

I think the thing to remember about the DMO increase is this too, it applies to a subset of consumers, in a subset of jurisdictions in Australia. The average increase projected for Australian consumers in the Treasury papers is 10 per cent. And the AER is really encouraging consumers to shop around and look for a better deal, if they can. The DMO applies to consumers who for one reason can't or won't shop around. We'd encourage people to really get into the market and see if they can get the best deal possible.

ASHLEIGH GILLON: So, Jenny McAllister, do you think you can still make good on that pledge that Labor made that power bills would be $275 cheaper by 2025 under Anthony Albanese? Or in hindsight, was that a mistake?

JENNY MCALLISTER: You'll remember that that was a modelled outcome of our policies made before this global crisis that has produced a very significant impact right across the world in terms of energy prices. It's a projection for 2025, and the one thing we're confident about is this: our program to reduce the exposure of the Australian economy to expensive inputs like coal and gas. and move to renewables will put downward pressure on prices. And the challenge, of course, for the Coalition who are making these criticisms is this: explain - 

ASHLEIGH GILLON: Jenny McAllister, let's go back to what Labor -

JENNY MCALLISTER: - Why it is you voted against -

ASHLEIGH GILLON: - The Coalition. Are you still sticking with that pledge or is that?

JENNY MCALLISTER: Well, I think - the Coalition do need to explain why they voted against price relief in December and they now need to explain their plan to roll back the measures which so clearly have put downward pressure on prices, downward pressure on the increases. We would have seen very significant increases this year. And the Coalition voted against the measures and the interventions that we proposed.

ASHLEIGH GILLON: Okay, so are you saying it's the Coalition's fault that Labor is unlikely to achieve your pledge of making power bills cheaper by $275 by 2025? Is that something Labor is walking away from now?

JENNY MCALLISTER: What I'm indicating is that we are very confident that continuing to enable the transition towards an energy system that contains more renewables will put downward pressure on prices. Right now, the economy is exposed to high prices for oil, coal and gas, a consequence of global pressures. A system that is built around renewables is less exposed to those pressures. And it's on that basis that we're confident that our plan to transition towards 82 per cent renewables will put downward pressure on prices. But in the short term, we have to deal with this global crisis. And it's why in December, we made really important interventions in the energy market and it's why in our Budget, we offered very significant rebates for targeted businesses and households to support them through this difficult year.

ASHLEIGH GILLON: Okay, well, it sounds like we shouldn't be holding our breath for that 2025 commitment. Jenny McAllister, appreciate you making the time. Thank you.