LEON BYNER: By far the biggest topic that you talk about and think about is your energy costs, for good reason. But the federal government have made some announcements and we're going to talk to the minister in a moment - the Minister for Energy - because the feds have decided that they want to stop these power companies price gouging, they also want to do something about late fees and as I said, up until now when people are telling you that your bill is going down, you ring me and say, Leon, my top right hand corner is going up, not down. I accept that. Let's talk to federal Energy Minister Angus Taylor. Angus, by what legislative means do you hope to stop power companies price gouging?

ANGUS TAYLOR: Well, it can either be state or Commonwealth legislation, Leon but it doesn't matter. There's a couple of ways of doing this and we'll be doing it in the coming months. The critical thing here is the loyalty tax that customers are paying right now for not constantly getting on the phone and threatening to switch has got to go. That loyalty tax has got extreme, in South Australia it's over $800 for a typical household, $3500 for a small business. If big energy companies are punishing loyal customers in this way, we need to take action. Now, many customers are doing that themselves but there's some customers- small businesses, they're just too busy. It is a lot of work. And we're stepping in.

LEON BYNER: Yes, so, how do you- what are you going to do?

ANGUS TAYLOR: Well, there'll be a reference price, a benchmark price against which we'll be measuring the default offers, that's the one you get if you haven't negotiated- gone in and negotiated an alternative price, a lower price.

LEON BYNER: How different is that price to what's already there?

ANGUS TAYLOR: Well, it is- you mean the default price or the standing offer you end up getting?

LEON BYNER: No. Well, put it this way, there's a percentage of people - and by the way the energy companies are saying two things about what you're just telling me; (1) they're going to fight it; and (2) they say that it's really not going to achieve much anyway because a very small amount of their customers are on this default arrangement.

ANGUS TAYLOR: Well, that's rot. Twenty per cent of small business customers are on this arrangement - 20 per cent. To say- they would say that. And the truth is that there are many customers who are on standing offers. And you know what? If you don't pay on time, you get whacked by being put on the standing offers by many retailers.

LEON BYNER: Well, you also get a late fee. Are you going to stop that?

ANGUS TAYLOR: Well, you don't just get a late fee; you get whacked back on to the standing offer. So, you're getting a very big late fee when you're working through. So, we're going to stop it. And the A triple...

LEON BYNER: How are you going to fix that? How?

ANGUS TAYLOR: Well, legislation - let's be clear. Now, we want the companies to get on and do it themselves but the legislation will give us the powers if necessary...

LEON BYNER: When?

ANGUS TAYLOR: So, the aim is to have this fully in place by 1 July with a down payment from the company...

LEON BYNER: That's after the election.

ANGUS TAYLOR: Now, hang on. Hear me out. I haven't finished. With a down payment from the companies on 1 January. Right? That's what we want. And that means the companies bring down their standing offers on 1 January, if they say no one's on it, why would they care about bringing it down?

LEON BYNER: Well, how much do you...

ANGUS TAYLOR: ...So, we want it down on 1 January. I'm not going to give you the number on the telephone, because I'd run into trouble with the competition regulator. But it will need to be a substantial reduction. We're not mucking around here. And Scott Morrison has been really clear on this, this is a guy who doesn't bluff. We're serious about it and we will use whatever means we have to to get those standing offers down. As I say, if the companies think no one's on them, why would they care about bringing them down?

LEON BYNER: Question is this, former Prime Minister had a meeting with these energy companies, trying to do the same thing, and we've got what we've got now. So...

ANGUS TAYLOR: Well, he hasn't tried to do this. This is a new announcement about how we're going to do it. We have been very clear we want a down payment on 1 January, full implementation on 1 July...

LEON BYNER: When you say down payment, what does that mean?

ANGUS TAYLOR: Well, they've got to bring those standing offers down to more reasonable levels on 1 January. And we've been very clear that there's a whole series of sticks - big sticks - we'll be putting into the legislation, including - including - requiring assets to be divested. In South Australia we've got a particular problem where the big retailers have tied up the market.

LEON BYNER: How are you going to fix that?

ANGUS TAYLOR: Well, they will be told that they've got to separate their upstream from their down- their wholesale from their retail...

LEON BYNER: You better explain to the people what you mean by- [inaudible] AGL...

ANGUS TAYLOR: Well, okay, so right now - so right now - if you're a little retailer in South Australia and you're trying to get into the market, it is very hard to get a contract with a generator. You need the power, you've got to be able to sell something to your customers. That means you need to get a contract with an upstream generator- a generator that can give you the power you need for your customers. Well, right now what they do is they say, well, you know what? You're not going to get any. So, how can a new retailer get into the market when that's going on? They can't. So, this is- these are the sort of games that are being played in the marketplace. South Australia has been amongst the worst of this sort of behaviour and the answer is put the powers for the Commonwealth government into legislation, which the ACCC and Treasurer can use if they have to if the companies keep doing this sort of stuff. Your bad market practices, dodgy market practises, excessive penalty payments, excessive standing offers when customers roll off their contracts, all of those behaviours they've got to stop, the powers will be there for the Commonwealth to act, if they don't.

LEON BYNER: When will people listening today notice any of this on their bill?

ANGUS TAYLOR: Well, if you're on a standing offer, we want it to be noticeable by the first of- from 1 January. And we want to see broader reductions happening, following up from that. So, the market price is changing on 1 July in your state and we'll be expecting to see changes announced well ahead of that - well ahead of that. So, that's what we're expecting. Now, on top of that, we are- we realise there's got to be more supply in the marketplace too, Leon - this is really crucial. And in your marketplace this is really essential because we've seen a loss of supply with Northern going out of the market and loss of other generation capacity, that supply has got to come back, we need enough supply to keep the prices down...

LEON BYNER: How are you going to do that?

ANGUS TAYLOR: Well, so, we will have a shortlist of projects by early next year, we're going out to expressions of interest now...

LEON BYNER: You're talking about an infrastructure project of electricity here?

ANGUS TAYLOR: Correct. Generation projects. So, we're asking people to come forward with projects which the Commonwealth government will assist to get up to make sure they happen and they're projects in markets where we haven't had enough competition where prices are too high, we'll be encouraging new supply into the market to bring those prices down.

LEON BYNER: Okay. You're going to ban- are you going to ban the late pay charges?

ANGUS TAYLOR: The late pay charges have got to reflect cost. There is a cost, a very small cost to a company when someone pays late, but they should be no more than the cost. The ACCC has made that clear. And that's what we'll be holding the companies to account on.

LEON BYNER: Alright. Angus Taylor, thank you. That's the federal energy minister.