ALAN JONES: I told you yesterday the Government would be unveiling a plan, which it claims will allow families and business to save hundreds of dollars a year off their power bills, and they've announced that the Australian Energy Regulator has started work on a price safety net. Now, I'll talk to Angus Taylor in just a moment. The concern I have here, Angus - and I know you're listening to me and it will be the first question I'll ask you - when we're prosecuting a case, we have to be able to do it in language that people understand. We're in the business of communication. Now, on so many fronts, for example, negative gearing or taxing retirees, why isn't the Government right out there in front, in the market, telling the public in simple language what the story is? Now, the Government is saying here it'll stop big power companies ripping off loyal customers who don't have time to shop around for a better deal and they are asking retailers to offer more competitively priced market offers and then standing offers. It could be paying up to $832 more a year for the cheapest market. Look, at the end of the day, we're all capable of finding the cheapest electricity but the fact is, if you cut out coal-fired power, you ain't going to have cheap electricity. Angus, good morning. Minister Taylor, good morning.

ANGUS TAYLOR: Good morning, Alan.

ALAN JONES: By the way, you're a well-educated man - a Rhodes Scholar. You were taught at school, I'm sure, that task is a noun, not a verb.

[Laughter]

ANGUS TAYLOR: Thank you.

ALAN JONES: God, I hate that - I hate that word. When people say, the Energy Regulator has been tasked with introducing [laughs]. You tell me, please, in layman's language, what a default price is.

ANGUS TAYLOR: Well, let me tell you what's going on here, Alan - there is a loyalty tax, which customers are being hit with. So, if your contract rolls over without negotiating a better deal you get slugged with a higher price - and I call it the loyalty tax. If customers who have stuck with their service provider and not got on the phone and had time, as many of us don't, to get a better price, then we get slugged with this loyalty tax. Now, we're saying that's not good enough. That loyalty tax is going to be worth up to $500, $600, $700 per year for a household customer and it's got to stop. So, we are simply saying-

ALAN JONES: So let's go back a bit. Okay. So, you're the provider, I'm buying my electricity from you.

ANGUS TAYLOR: Yes.

ALAN JONES: Right? That's the first thing. So that's what you mean by the provider, you're providing me with the electricity.

ANGUS TAYLOR: That's right.

ALAN JONES: And then you're saying I've got a contract with you-

ANGUS TAYLOR: Yes.

ALAN JONES: And you're then saying when the contract has to be renewed, we roll it over-

ANGUS TAYLOR: Yes.

ALAN JONES: And invariably, there is a mark-up on the price.

ANGUS TAYLOR: There is a mark-up and that number has got bigger over time.

ALAN JONES: Right.

ANGUS TAYLOR: In fact, in Victoria, for instance, it's doubled. Different states are different, but it's gone up a lot and it means if you forget to ring them or if you haven't got time - a lot of small business people don't have the time - you get whacked with a higher price. We're saying well that is completely unfair. It is inappropriate for customers who are loyal to me as a service provider, the electricity provider, that I should charge that kind of premium to someone who's-

ALAN JONES: Yeah, but now this is the Liberal Party. We are representing the Liberal Party here-

ANGUS TAYLOR: Yes.

ALAN JONES: I think, not Putin's Socialist Party-

ANGUS TAYLOR: No - I understand that.

ALAN JONES: So the market would say, now the market would say: well, hang on, that mark-up, that increase, is to accommodate things like, their words were innovation and investment in new plant. You can only do that out of profit. This will limit the investment and see, if I'm getting my electricity from you, the provider, you've got to get your electricity from someone else. Now, if we are then having more renewables than we are coal or gas - because there's an incentive to be in renewables because we pay $3 billion in subsidies - the provider has got to buy his electricity from someone and it is getting dearer and dearer and dearer because we're winding back coal-fired power.

ANGUS TAYLOR: Well, this is another part of our announcement, but just to finish on that point - I hear what you are saying but these companies are making more than enough money to invest, Alan. What we're seeing is some very bad behaviour in the market, and markets have got to work. So, we're saying it is not good enough to keep whacking customers in this way and then when you make them very confused so there's a real-

ALAN JONES:  Alright. Well, let's go back to the analogy - I'm their customer. Let's go back to the analogy. I'm the customer and my contract with you - you're the provider for the last five years - has been $1000 for each of the last five. The contract now is to be renewed on 1 November. Okay?

ANGUS TAYLOR: Yes.

ALAN JONES: Okay? So I've been paying $1000 for five years, what do I say to you? You're the provider.

ANGUS TAYLOR: Well, you just say: 'I want a better price'.

ALAN JONES: So, I want to pay less next year than I'm paying this year.

ANGUS TAYLOR: Yes, and-

ALAN JONES: How can that be? How can business afford to give me a product next year for less than they're getting from me this year?

ANGUS TAYLOR: Because this year they're making out-

ALAN JONES: You're saying this year they're ripping me off?

ANGUS TAYLOR: Yes, exactly. So what we've seen in the market, a change in the last few years where people are getting whacked if they don't get in and negotiate a better price each year and that-

ALAN JONES: How many providers are there?

ANGUS TAYLOR: Look, there's three big players but lots of smaller ones. The vast majority of people are with one of the three big players, Alan, and the lack of competition here-

ALAN JONES: So is there collusion here?

ANGUS TAYLOR: Well, I'm not going to use that word but what's clear is that the prices and particularly this loyalty tax for customers who don't have the ability or the time to get in and negotiate a better price, that number has gone up a lot. A part of the way that companies have done this is by confusing everybody when they ring up and ask for a plan, when they do ring up, they'll get told all sorts of numbers, and get very, very confused. We just want to clean that up, so customers get a fair deal.

ALAN JONES: Am I right in saying there's a hidden agenda here? Look, you know - and I know you know, because you're too smart not to know - that the way out of better prices for electricity is to stop demonising coal-fired power and we've got to stop closing coal-fired power plants. Now, when is the Government going to sort of bite that bullet and say to hell with Paris, and to hell with Shorten, and to hell with all the lefties, and the 29 per cent in Wentworth that said climate change, 29 per cent. 71 per cent weren't racing to the booths to vote for Kerryn Phelps for climate change. When is someone in the Government going to say: Listen, we've got it wrong. We've swallowed the hoax. We've demonised coal-fired power. We buggered up the economy. We're paying higher prices for electricity than we should have and we've got the greatest energy resources in the world. Why don't we have the cheapest electricity? Well, this is how we're going to get it. Now, you're not going to get it by having a default price in relation to the provider.

ANGUS TAYLOR: Well, let me be clear. There is a lot of money for many customers in getting that price right but - and this is the second part of our announcement yesterday. There were three parts to the announcement - the default price is one of them, that getting rid of the loyalty tax. The second part was saying we are running a process now where we are asking people who've got good projects for reliable fair dinkum power - power that comes to the customer when they need it, not just then the wind blows and the sun shines. We're asking project proponents to come forward, give us their projects. Now, we're going to come down shortlist of a smallish number of projects early next year that we will-

ALAN JONES: Why does Government have to be involved? You're starting to sound like Jeremy Corbin. I mean, why does Government have to get involved in this? Why don't we just say it'll be a level playing field, no subsidies to renewable energy and you'll find investment in coal-fired power will go through the roof?

ANGUS TAYLOR: Well, unfortunately, I don't think that is right and let me tell you why. For years and years, Alan, we have had - as you know relatively well and you and I have talked about this a lot in the past - we have had very big subsidies and we've got an enormous amount of intermittent power - power that essentially solar and wind that doesn't come when you need it. It's only there when the wind blows and the sun shines. So, we've got this situation, whether we like it or not we are where we are and that means, in order to get that baseload, that power that arise when I need it, we are going to have to intervene. Now, do we like doing it? Of course not. We prefer not to but are we in a position now where we have to? Unfortunately yes-

ALAN JONES: Okay. Well, before you go-

ANGUS TAYLOR: We are doing it. Early next year, we will have a short list of projects and they must be projects where the power comes when you want it, when you need it.

ALAN JONES: Well, the price is the issue. I mean, we've got the greatest resource - I mean, we're still doing nothing about nuclear energy, we've got 40 per cent of the world's uranium, don't start me on that - but just one thing before you go, what, therefore, today - because the statement today and people are going to hear it - you're going to introduce default prices by the end of April. What, simply, in layman's language, is a default price?

ANGUS TAYLOR: It is a fair price when you don't have time to negotiate with a service provider or with an electricity provider.

ALAN JONES: And who decides it's fair?

ANGUS TAYLOR: The Australian Energy Regulator will set that price each year.

ALAN JONES: But the poor customer, how does he know whether it's fair or not?

ANGUS TAYLOR: Well, it's my job to make sure it's fair. The Australian Energy Regulator will make sure it's fair. I can assure you, Alan, we are crawling all over this. This will be a fair price for customers who don't have the time to get on and negotiate. You know how painful it is - three or four, five to 10 often phones calls you've got to make.

ALAN JONES: So we used to have the cheapest electricity in the world, will we have it now?

ANGUS TAYLOR: Well, if we do all the things we talked about yesterday it's not [indistinct]. That price piece that we were just talking about is just a number of things we're doing. We've got to get that baseload power, that power when you want it. Fair dinkum power as Scott Morrison likes to call it. We've got to get that into the system.

ALAN JONES: Alright. Well, now, look- hang on. Okay, right. Now, look, the board's on fire here and I suspect - I don't know - I suspect they might be either confused or in disagreement. Can you just hang on and just listen? It'll help you. Cole, hello.

CALLER: Hello.

ALAN JONES: Yes, Cole?

CALLER: Well, he's fiddling with retail and doing nothing about supply. He needs to get his bloody facts together and get out of Paris, and increase the supply. Bugger the retailer. They can only give you so much.

ALAN JONES: [Laughs] You see, Angus, people are very smart.

ANGUS TAYLOR: Well, we are doing supply. I mean, let's be clear. I just said we are absolutely doing supply - but he's absolutely right. The announcement yesterday had three pieces.

ALAN JONES: But, you see, I come back to the point-

ANGUS TAYLOR: And-

ALAN JONES: Now, but hang on, Angus, I come back to the point. If Ross here is making bread and I'm making bread, and Ross is being subsidised for the bread, well, my shop's going to close down and we are subsidising one form of supply - namely renewables - and we're leaving coal out there to whistle in the wind.

ANGUS TAYLOR: And the renewable energy target subsidies will be essentially gone by the early 2020s, Alan. They are not driving investment now but we've got to get baseload-

ALAN JONES: It's 2018 now.

ANGUS TAYLOR: Well, look, Alan, you and I have talked about this in the past, and we are getting supply coming into the market. This is a crucial part of the announcement yesterday that you didn't mention up front but it is very, very important and getting more baseload supply - supply that gives you the power when you want it - that is absolutely our focus at this point.

ALAN JONES: Okay, alright. Okay. We like to box but we're beaten by the bell. I think we need to talk again, Angus, but I'm grateful for your time today.

ANGUS TAYLOR: Good on you, Alan.