JUSTIN SMITH: On this Sunday on Macquarie Weekly, on the line is the Minister for Energy, the Federal Minister for Energy, Angus Taylor. Minister, thank you for your time.

ANGUS TAYLOR: Hi, Justin. Good to speak with you.

JUSTIN SMITH: Will you be able to bring electricity prices down?

ANGUS TAYLOR: Absolutely. We have said to the electricity companies we expect that loyalty tax that customers are paying - that these customers who haven't got to get on the phone and negotiate a better price - we want that loyalty tax gone by 1 July. We want to see wholesale price reductions, which they haven’t passed through to consumers, and over time, we are working to make sure there's more supply coming into the market with a short boost of projects which we are expecting to have in place by early next year.

JUSTIN SMITH: Okay. I guess with electricity prices, it's one of those things if you're not confused it means that you haven't been listening. It is incredibly hard to get through all of this. How does it work? When you talk about the loyalty prices, for people listening across Australia, how is that going to bring their prices down?

ANGUS TAYLOR: Well, there's two types of customers - there are those who get on the phone each year and negotiate a better price and they can end up with their price discount, which can be 20, 25 to 30 per cent versus what they would otherwise get, and there are those who don't have time for whatever reason, often business people who simply don't have time. They are whacked with what I call a loyalty tax, which has gone up over time, which are those who are, they're trusting the energy companies to give them a fair price even though they haven't had time to get on the phone and negotiate something better and they're getting whacked. We want that gone. Now, that's the first piece.

JUSTIN SMITH: But just on that - if we could just look at that one first if you don't mind, Minister - with that, if, for example, I have already negotiated my best deal, electricity prices are not going to come down for me, are they?

ANGUS TAYLOR: Well, no, you haven't let me finished. So the next thing is that wholesale prices are coming down now. The board price is finally where it's been. Spot prices are coming down and we're expecting the companies to pass those through. So that applies to customers who are negotiating constantly. Now, I'm not going to tell you or everybody out there what their price will be this time next year or the year after, everyone's situation is different, but those two things alone are important in bringing prices down. The third part is we're saying to the energy companies we're going to be bringing in extra supply and as we bring in extra supply, we know, simple economics, the price will come down.

JUSTIN SMITH: But how do you- do you guarantee it? That prices will come down?

ANGUS TAYLOR: Well, what we'll guarantee is that the electricity bill for Australia will come down. I mean, we can guarantee that. I can't guarantee for individual customers because everyone's on a different plan and different situations.

JUSTIN SMITH: But then how do you know if it's going to work, Minister?

ANGUS TAYLOR: Well, I know it's going to work because the electricity bill for Australia will come down. That's how I know it's going to work. That's what-

JUSTIN SMITH: Will your bill come down?

ANGUS TAYLOR: Well, I'm not going to get into my bill or anyone's individual bill. What I'm going to say is that the electricity bills for Australia will come down. Now, everyone is in a different situation. What I can say is that those who haven't been negotiating better prices or getting stung by a loyalty tax, will get better prices. I can say that the electricity bill for Australia will come down. There is no question about that. I'm not going to get into people's individual bills, everyone's price-

JUSTIN SMITH: But will that come down because of something that you have done or will that - because you said the wholesale price is dropping and dropping anyway, is that because of anything that you have done?

ANGUS TAYLOR: Well, except that the retailers haven't been passing that on and this is the point - two things have happened, or three things has happened. Number one: people have been whacked with increasingly large loyalty taxes.

JUSTIN SMITH: Yeah.

ANGUS TAYLOR: When they haven't got time to go and negotiate. That's unfair. We want to see it gone. Secondly, we're seeing wholesale prices coming down. Companies haven't necessarily reflected that in their prices and we want to see that reflected. Then thirdly, there hasn't been enough supply in the market. We saw the withdrawal of Hazelwood and Northern in South Australia-

JUSTIN SMITH: Yeah.

ANGUS TAYLOR: There's concerns about Liddell. Supply will be made to ensure that there's enough there that therefore we've got low-cost, affordable, reliable power coming on, and over the medium to longer term, that will bring down prices. So, look, these are all important impacts. They will bring down Australia's electricity bill. They will bring down the bills for those who have been paying a loyalty tax. That is extremely important - not just for households, but for businesses small and large, businesses who so many Australian jobs in regional areas rely on.

JUSTIN SMITH: Minister, with the loyalty tax though, that is something that anybody could get on the phone, and look, I know it's confusing and many people, particularly elderly Australians, can't get on the phone and do it. It is just far too confusing. But that is something that anybody can do anyway. How is that the Government pulling a rabbit out of the hat? I mean it sounds like you've only pulled out ears.

ANGUS TAYLOR: I'm not pulling a rabbit out of a hat, I'm talking about common sense here. I mean, this is all common sense. We're not talking about rabbits out of hats. We're talking about sensible things government’s should be doing and helping citizens to get a fair deal. Now, you know, the truth is that we have - you have amongst your listeners older Australians who don't want to spend three hours on the phone to a call centre in the Philippines. You've got small business people who are busting ass every day just to make ends meet and forget to ring the electricity company before the contract rolls out. You've got consumers out there who are travelling an hour each day to get through and from work. Well, because they're trusting their electricity company to give them a fair deal and we are making sure that they do. This has got so bad that that loyalty tax in Melbourne for instance has doubled in the last four years. Similar increases in many other parts of Australia. Look, you know, this is unfair.

JUSTIN SMITH: It is. I agree.

ANGUS TAYLOR: Australians are expecting a deal. The Government has a role to play in this.

JUSTIN SMITH: You do have a role to play in it. The only problem is - and I've been listening to you do various interviews this week - and here we are on a Sunday and you're still not able to tell us how much it is going to drop by. Now, I think that that is-

ANGUS TAYLOR: Well - everyone is different.

JUSTIN SMITH: Now, I know you say you don't want to talk about individual bills.

ANGUS TAYLOR: Absolutely ridiculous. What is clear, though-

JUSTIN SMITH: What is ridiculous? I'm sorry, I missed something. What is ridiculous?

ANGUS TAYLOR: It's ridiculous for you to talk, to ask me about any one specific bill because I don't know the circumstances. What is fair to ask, though, is are we bringing down Australia's electricity bill? That is a fair question. And the answer is yes.

JUSTIN SMITH: Yeah, but you need to be able to - you say you'd guarantee it, but you need to be able to show that will work. Let's play a little game. I'll show you mine if you show me yours. My last quarter was $501. Now, how much, under your plan - 2 January next year - how much less should I be paying?

ANGUS TAYLOR: I don't know what price you're on. I don't know who you're with. I don't know any of that stuff. But what I can say is that if you look at the total electricity bill Australia is paying, it will come down and then many customers will benefit from that, and the ones we are most concerned about are those hard working Australians who simply don't have the time to get on the phone and negotiate a better price every day.

JUSTIN SMITH: Do you know - and I'm not trying for a ‘gotcha’ moment here and you might think I am. Do you know how much you paid last quarter?

ANGUS TAYLOR: Yes, I do, but I'll tell you that is not, I'm not going to talk to you about my electricity bill - this is about Australia's electricity bill. That's what matters.

JUSTIN SMITH: No, no, but this is important. If the Energy Minister is not able to tell me how much less he's going to be paying after January next year, I think that's an important point.

ANGUS TAYLOR: Well, it's not about my bill. It's about every Australian.

JUSTIN SMITH: It is about your bill and it's about my bill.

ANGUS TAYLOR: Let's be clear here. I am not doing this job to get my electricity bill down. I am doing this job to get Australians' electricity bills down. That is my focus. It is a clear focus and we are doing that by whacking the loyalty tax. Look, these energy companies have behaved irresponsibly.

JUSTIN SMITH: Yes.

ANGUS TAYLOR: We're doing that by making sure wholesale prices come down. We're doing that by making sure network charges come down, and they are coming down, differently in different regions. This is another factor which will differ across all different parts of Australia, but they are coming down because of important policy changes that have been made in recent times and policy changes that will continue to be made. That is the job of Government, that is my job, and I will do it every day.

JUSTIN SMITH: Albeit, without some pretty straight answers, if you don't mind me saying-

ANGUS TAYLOR: The straight answer is clear: Australians' electricity bill-

JUSTIN SMITH: It's not clear. It's not clear. I don't see how you can say that. But look, I want to ask you this - why is it that competition does not work with electricity? I mean, you have two people that are selling lemonade on a corner. The basics of capitalism is that two people - so you know, the price drops, naturally. Why does that not work with electricity?

ANGUS TAYLOR: It's a very good question and there's a couple of reasons for that. The first is that there are simply not enough players in the market right now. Rod Sims, the ACCC Chairman, has made this point very clearly in his report. If you look across most markets in Australia at the retail level, three players or so will often have 60 or 70 per cent of the market. If you look at the wholesale level, it's similar and they're often the same players so they both have the generation and the retail. If you look at the network level, typically it's one player in one region. So there is a distinct lack of competition, and that is why we are doing things to encourage more in it, and that new supply, we would like to see that for new competitors. Secondly, there is a role for Government to play because of that lack of competition. So, your point is a good one. This is a major factor at work, and we must certainly address it.

JUSTIN SMITH: What are you going to do if you can't drop people's prices? What if somebody paying $700 a quarter right now still pays the same amount in February next year?

ANGUS TAYLOR: Well, my focus is on the overall Australian electricity bill because that's the reasonable thing to be going after. I tell you - if the energy companies don't do the right thing, we will make them, it's as simple as that, and we have been clear with them about that. Now, my hope - and I'm pretty optimistic about this - is that they will start doing the right thing, but if they don't, we will take whatever action we need to.

JUSTIN SMITH: Minister, thanks for the time. Appreciate it.

ANGUS TAYLOR: It's an absolute pleasure.