FRAN KELLY: Angus Taylor, welcome to Insiders.

ANGUS TAYLOR: Thank you for having me.

FRAN KELLY: Hundreds of thousands of school students were marching and keep on marching because they're worried about the future of the planet. Are you worried?

ANGUS TAYLOR: It's good to see that we have active citizens amongst our kids and we always encourage that. I don't think that it should be at the expense of their education, but the point here, Fran, is that we are taking strong action. We need to take strong action. This has to be globally coordinated. We have to do our bit as part of that. We'll over achieve on the 2020 obligations as we over achieved on our 2012 obligations, and we've laid out to the last tonne how we'll achieve on our 2030 obligations. So strong action-

FRAN KELLY: Just, let me interrupt you there. You've said this many times now, but the facts are, and these are facts coming from the Government's own numbers that emissions are going up in Australia, not down. So how are we going to over achieve, as you say? We're going in the wrong direction.

ANGUS TAYLOR: We can cherry pick time periods. We’ve had reductions in two of the last-

FRAN KELLY: These are periods for a year.

ANGUS TAYLOR: We have had reductions in two of the last three-quarters. It's true that over the last year, there's been a 0.6 per cent increase, and that's more than attributable to our gas exports, which are reducing emissions in China and South Korea and Japan - but Fran, the point that really matters here is that this has to be globally coordinated action and Australia needs to do its bit, and we are. That is what really counts here, and delivering. As I said, we'll deliver on our 2012 obligations, not by a little bit, but by 367 million tonnes, which is a stunning over achievement and one for which all Australians should be given great credit.

FRAN KELLY: Just to go to the figures again though - how are we delivering if transport emissions for the last year are up 10 per cent, industry emissions are up 10 per cent and fugitive emissions are up 45 per cent? Where is the sign that we're cutting emissions?

ANGUS TAYLOR: Well, Fran, if you exclude gas exports over recent years-

FRAN KELLY: Why would we exclude them? Are you planning on phasing them out?

ANGUS TAYLOR: Because frankly they are reducing emissions in our customer countries – in South Korea, Japan and China of course which is a very big-

FRAN KELLY: Hang on, Minister - if our gas exports are reducing emissions in other countries, what about our coal exports? Are they increasing them?

ANGUS TAYLOR: Well, the growth has been in our gas exports. Look, we have gone from having a gas-

FRAN KELLY: We are the world's second biggest coal exporter.

ANGUS TAYLOR: Can I finish? We have gone from an industry which didn't exist a few short years ago that is now the biggest in the world, our LNG export industry. Now, we wear emissions from fugitives and from the compression of the gas, which requires a great deal of energy, and the reductions which are the equivalent of up to 28 per cent of our domestic annual emissions are gained by Japan, by South Korea and by China.

FRAN KELLY: Sure, but if you can count those, then why aren't you also counting the impact on emissions of our coal exports?

ANGUS TAYLOR: Because the growth has been in LNG exports. Look, and the really important point here, if you take a step back from this, we can cherry pick time periods and sectors, what counts-

FRAN KELLY: Emissions have gone up over the past four years haven’t they?

ANGUS TAYLOR: Hang on, what counts is our international obligations. That's what counts. We entered into a commitment for Kyoto for 2012, which we beat. We entered into a commitment under Kyoto for 2020, which we will beat by 367 million tonnes. We've entered into a commitment under the Paris Agreement for 2030, and we've laid out to the last tonne how we're going to achieve that 12 years ahead of time. No government has laid that out so far ahead. The Climate Solutions Package, $3.5 billion dollars, which is targeting 328 million tonnes of reductions.

FRAN KELLY: Okay, let's go to the global position, because these school kids are just reinforcing the message and the concerns of our neighbours in the Pacific. Some of those leaders are in New York now arguing for change. Our Prime Minister at the recent Pacific Islands Forum signed up to a statement that agreed there was a climate crisis facing the Pacific and that noted: “that urgent action was needed to limit warming to 1.5 degrees”. We signed that. How are we doing our part beyond 2030? How are we going to get to zero emissions by 2050, which is what's needed to keep warming to 1.5 degrees?

ANGUS TAYLOR: Well let’s look at it in two time periods. The first time period to get to 2050 is the practical one ahead of us is 2030.

FRAN KELLY: And you keep saying that we're going to reach that in a canter. Next year, you’re going to have to lay out the next plan, aren't you?

ANGUS TAYLOR: We've laid out the 2030 plan, and-

FRAN KELLY: No, but beyond that?

ANGUS TAYLOR: Beyond that, the truth about what has to happen in the medium to longer term, beyond 2030, is that R and D and technology have to play a crucial role. We still don't know, globally, exactly how we can reduce emissions in the steel industry, in aluminium, in agriculture and in transport, but, but, we do need to invest in technologies. We're investing $140 million in hydrogen. We know that hydrogen has the potential to play a really crucial role. Biofuels. Sequestration. I mean, these are technologies that offer us real potential. They are the technologies that can provide us the pathways, and we're making significant investments where Australia has the potential to do so. Hydrogen is obviously one given our status as a big gas exporter now where we can play a very significant role.

FRAN KELLY: Okay, you talk about investment though - business wants rules to guide their investment in new generation, rules around emissions. You're the Minister for Energy and Emissions Reduction. Why won't the Government recommit to the NEG, the National Energy Guarantee, which is all about rules to bring in emissions? Because business wants you to, the states want you to, even the Opposition says that it will back it straight away.

ANGUS TAYLOR: Well Fran, the Opposition called it a ‘Frankenstein policy’, so it is odd that they would take that view. But let's talk about the issue and that's what counts here - there's two parts to the NEG. The Retailer Reliability Obligation that went in-

FRAN KELLY: Yep, that's still in place but what about rules around emissions?

ANGUS TAYLOR: Let me finish. It went into place from July 1. The second part was a 26 per cent emissions reduction target. We will achieve that nine years ahead of time. There is no debate about this. It is very clear we'll achieve it. Now, the reason is we're seeing record levels of investment in solar and wind. In 2018 alone, we were the highest in the world, almost double the next country which was Japan, on a per capita basis.

FRAN KELLY: Well, let me go to that because the Renewable Energy Target is due to wind up. The Clean Energy Council have said this month in a report that a lack of federal energy policy certainty and a combination of a range of regulatory challenges means investment confidence in large scale renewable energy is fragile. It says, "Investment in new renewable energy projects has collapsed."

ANGUS TAYLOR: Well, that's not right. The Clean Energy Regulator informed me this week that just in the last six months, the first six months of this year, we've seen 1.4 gigawatts, that’s 1400 megawatts, of capacity committed. That was more than the whole of 2016. So we're seeing extraordinary investment. The challenge now is this, Fran, the challenge is to make sure investment in our electricity grid is balanced. We need dispatchable power on demand balancing the intermittent power we’re getting from solar and wind. If we don't get that balance right, we won't be able to deliver on a fair value for energy for Australian consumers, households and small businesses and industry.

FRAN KELLY: Okay.

ANGUS TAYLOR: That balance is now the key. We're reaching our emissions targets way ahead of time. The challenge is, the affordability and reliability that is so crucial to jobs, to household budgets and to small business budgets as well.

FRAN KELLY: Let's move on. The Government introduced the so-called big stick divestment bill this week which gives the government the power to force companies to get rid of assets if they're engaging in anti-competitive behaviour. Do you plan to use that divestment power to force AGL to sell the Liddell coal-fired power station so it can be kept open beyond 2023? Because there are some in your party room that want you to do that?

ANGUS TAYLOR: The purpose of the legislation is to make sure that we have genuine competition in the electricity market and the ACCC told us that the situation in electricity was “unsustainable and unacceptable”.

FRAN KELLY: Absolutely - the ACCC didn't recommend this power though.

ANGUS TAYLOR: Well, the ACCC-

FRAN KELLY: But my question is do you plan to use this power to force AGL to divest itself of the Liddell coal-fired power generator so you can keep that going?

ANGUS TAYLOR: Just to make the point about the ACCC - the ACCC made clear that we needed to deal with issues like market manipulation, ensuring that there are fair retail margins, and that the contract market was competitive.

FRAN KELLY: Sure.

ANGUS TAYLOR: In terms of Liddell, Fran, we've put together a taskforce working closely with the New South Wales Government and AGL. The aim here is very clear - we either need like-for-like replacement or extension. The idea that you can shut major baseload generators prematurely without a clear plan as to what they're going to be replaced with, simply doesn't work. We saw that with Hazelwood.

FRAN KELLY: So, what does that mean for Liddell?

ANGUS TAYLOR: Well, it means that we're working through that with the New South Wales Government and AGL. But let me tell you, if there is not either extension or like-for-like replacement, then this will be unacceptable because you will see upward pressure on prices and a loss of reliability as we saw in South Australia and we saw in Victoria where major baseload generators were taken out of the market without a plan. Now we have time-

FRAN KELLY: Talking about prices, the energy industry says this move, this legislation will force prices up, not down, because investors will be spooked by the threat of heavy-handed government intervention, that the risk implicit in that. Will these new powers help bring prices down and by how much?

ANGUS TAYLOR: Well, the energy companies would say that. But the point is-

FRAN KELLY: It's not just the energy companies, it is consumers, too.

ANGUS TAYLOR: Well, there's a lot of consumers who are very happy to see a more competitive market. The point I would make is this - if we want lower prices and we want investment, we need a competitive market. People don't want to invest, investors don't want to put money into a market which is manipulated or distorted. What we have in this legislation is a conduct being dealt with, which is unacceptable. Conduct around distortion of the wholesale market, contract markets, failure to pass on substantial and sustained savings to customers. All of those conducts are being dealt with in the legislation. Conduct which was laid out in the ACCC report as unacceptable and unsustainable.

FRAN KELLY: Okay, so how much will this bring prices down?

ANGUS TAYLOR: We've said before the election, we want to see a substantial reduction in wholesale prices as well as those being passed on to customers. And we've said depending on the state-

FRAN KELLY: Have you got a figure? Have you got a number?

ANGUS TAYLOR: Well, we said depending on the state, we want to see prices around that $70 a megawatt hour mark. That's what we want to see, the big energy companies working towards.

FRAN KELLY: Okay.

ANGUS TAYLOR: And the smaller players in the industry.

FRAN KELLY: On another issue, Labor has been pursuing you in the Parliament over recent months because of a meeting you had with the Department of Environment concerning the EBPC listing of the Monaro grass lands. A company called Jam Land which you and your family have a financial interest in, had a compliance notice served on it for clearing some protected grass lands. Why didn't you declare your interests in Jam Land when you sat down with the Department to talk about the laws?

ANGUS TAYLOR: Well I declared my interest in accordance with the rules, Fran. It is very clear and I stayed-

FRAN KELLY: But why didn't you think to declare it at the meeting?

ANGUS TAYLOR: Well, I've declared my interests in accordance with the rules. The minister was fully aware of that.

FRAN KELLY: It's still not declared in your ministerial interests, is it?

ANGUS TAYLOR: It's declared in accordance with the rules, Fran, and the point that I would make is that I have stayed at arms-length at all times from that compliance matter. But I'll tell you what I have done - I've argued for farmers in my electorate who deserve advocacy and representation on an issue that was affecting them. That was the right thing to do.

FRAN KELLY: But Minister, isn't it true though that the company you have a family interest in, Jam Land, is actually the only company with a compliance notice served against it on these issues?

ANGUS TAYLOR: I have no idea what compliance actions are on foot. I stay away from that and at arm's length. I'll tell you what I do do Fran, I advocate for farmers in my electorate, and I'll do it every day of the week because they need representation on issues like this, and drought, and all of those other issues that are hugely important.

FRAN KELLY: Okay. I understand that, but didn't you think when you were meeting with the Department on the broader issue that it would have been fit and proper to tell them that you had a compliance notice against a company you're a member of, you’re an investor in?

ANGUS TAYLOR: My obligations are to declare my interests to the Parliament and to the Prime Minister, and I did that in accordance with the rules. They're my obligations. Now, I understand that the Department was fully aware of the issue.

FRAN KELLY: But not because you told them?

ANGUS TAYLOR: Well, my obligation is as I say, to disclose to the Parliament and to the Prime Minister, and of course, the minister, which was Josh Frydenberg at the time, was also aware. So, there was no lack of disclosure and compliance on this, Fran.

FRAN KELLY: Okay.

ANGUS TAYLOR: But I tell you what, farmers need representation. And I will do it every day of the week.

FRAN KELLY: Angus Taylor, thank you very much for joining us.

ANGUS TAYLOR: Thanks Fran.