SABRA LANE: Power bills for nearly 800,000 residential and small business customers have fallen since July due to the Federal Government's crackdown on energy prices. That's the finding from the competition watchdog the ACCC. It's handed down another of its regular reports on the electricity sector, and it estimates the savings might be between $130 and $190 a year. But there's a sting: at the same time, the big three power giants AGL, Origin Energy and Energy Australia have actually increased their default offers to customers. Mr Taylor, welcome back to AM. We’ll get to electricity in moment. First, as Energy Minister, what will happen to Australia’s petrol prices as a result of what’s happened in Saudi Arabia over the weekend?

ANGUS TAYLOR: Sabra, can I start by condemning those attacks. They were attacks on civilian facilities and they shouldn’t happen and they should be condemned. I know many of our ally countries around the world are saying exactly the same thing. Look, the IEA has informed us that we are well-stocked, that the world is well-stocked. This is a global disruption, it’s about global prices, and so we expect any impact to be minimal.

SABRA LANE: But prices will go up?

ANGUS TAYLOR: I’m not going to predict prices, but what we do know is the expectation at the moment is production will come back on reasonably quickly and we have good stocks around the world, and so the impact will be minimal. That’s the advice we’re receiving from the International Energy Agency.

SABRA LANE: If Australia needs to access an emergency US reserve, what’s happened with the negotiations with the US over that given that the US might need to access its own reserve ahead of us?

ANGUS TAYLOR: Well those negotiations are proceeding, but can I say, this is a global issue. Look, oil disruption and disruption of this sort is typically global, and that’s why the IEA is focused on having global stocks in place. Now, we have those - the IEA has informed us of that. They expect high levels of stocks around the world. Everyone has to do their bit. We’re doing our bit as are other countries around the world. That’s why we expect the impact to be minimal, Sabra.

SABRA LANE: So on that reserve, will Mr Morrison progress talks on accessing that while he’s there this week?

ANGUS TAYLOR: We’re continuing to progress those talks and we will, you know, and these are important discussions. The world has to make sure there’s enough stocks in place to be able to deal with these sort of disruptions. And that means we have to do our bit.

SABRA LANE: Sure, but on the policy of Australia accessing, wanting access to that?

ANGUS TAYLOR: Yes, no, no, we have to do our bit. One of the things we’re doing is we are negotiating with the US around strategic stocks. Those negotiations will continue. I’m not going to disclose every last bit of the negotiations but they will continue.

SABRA LANE: To power - the ACCC has found that 800,000 customers have had their power bills go down, but that the discounts offered by the three big energy retailers to customers have actually gone up by a noticeable amount. That’s what they’re saying. How’s that good for consumers?

ANGUS TAYLOR: There is three bits of good news here. The first is that we are seeing significant reductions in standing offers. So they’re the prices you get if you don’t have time to negotiate. We know almost 25 per cent of small businesses are on standing offers for instance, and a large number of households - so that’s great news. We’ve also seen reduction in the sneaky late payment penalties that have been in the industry for some time and have got worse in recent years. We’re also seeing a lot of competition and aggressive pricing from the smallest players. One of the things we’re also seeing is the bigger players being less aggressive. The message here for consumers is shop around and go to those smaller players. They are making more aggressive offers than the big players, that’s very, very clear from what we’ve seen from the ACCC.

SABRA LANE: What message do you have for AGL, Energy Australia and Origin, because they are the three big companies that we’re talking about? They’ve lifted their prices as a consequence of your Government policy.

ANGUS TAYLOR: Well they haven’t lifted their prices, their standing offers are down. But their lowest- their lowest offers are less aggressive than the smaller players-

SABRA LANE: That’s right, they’ve gone up. Let’s be frank.

ANGUS TAYLOR: The lowest offers, which a relatively small number of people are on. But my message to the big companies is clear - they need to do the right thing by middle Australia, they need to do the right thing by the quiet Australians. We’ve got the smaller players now being very aggressive in the marketplace. I’m going to encourage people to shop around and to look at those smaller offer discounts. The big players, frankly, right now, the message is clear - you’ve got to do the right thing or we’ll continue to encourage people onto those smaller retailers and by the way-

SABRA LANE: Minister, sorry, you know very well and the consumer watchdog does too, they often say to people shop around, get a better deal. Most consumers don’t.

ANGUS TAYLOR: Well actually we’ve seen record numbers of people switching offers over the last four months, Sabra.

SABRA LANE: How many?

ANGUS TAYLOR: We’ve seen very high levels. In fact, we saw from the advertising campaigns that were done earlier this year, as much as 60 per cent of the people who saw those campaigns responded to them.

SABRA LANE: How many people are we talking about?

ANGUS TAYLOR: Well we’re talking about roughly around 30 per cent who actually acted as a result-

SABRA LANE: How many thousands?

ANGUS TAYLOR: Well that’s a large number of Australians, it’s in the millions not thousands. So we’re seeing large numbers of people who are shopping around. Now we’d like to see more. But look, what we’ve seen in the ACCC report is another reason why our competition reforms are appropriate, Sabra. We do want to see this legislation which we brought forward to the last Parliament, which will be brought forward to this Parliament in the coming days and weeks-

SABRA LANE: That’s the big stick legislation that you’re talking about?

ANGUS TAYLOR: Yes, that’s correct. Yes.

SABRA LANE: You’re tweaking it now so that the courts will have a final say on that, not ministers. Why have you done that?

ANGUS TAYLOR: We did that in the last Parliament as well, that’s not new. But we took the view that it’s appropriate for the most extreme remedies, for the most egregious actions that are taken or conduct from the big energy companies, it should be court-ordered based on a recommendation from the ACCC. But the important point here, Sabra, is that the big energy companies need to do the right thing by middle Australia, and this legislation is part of us sending that very, very clear message whether it’s in the wholesale market, in the way they contract or indeed in the retail market, which is what we’re talking about today, they need to do the right thing. This legislation is being put to the Parliament. It was opposed by Labor 14 times in the last Parliament. We are hopeful that in this Parliament we will get the support we need from Labor to get this through.

SABRA LANE: Okay. The Business Council of Australia which opposed the Bill before the election now says it respects the Government has a mandate for this. What’s your response?

ANGUS TAYLOR: I’m pleased about that. I mean, I think we are seeing from the business community now an increasing recognition that the focus needs to be on middle Australia, on the quiet Australians in the way the business community does what it does, the way it sells services and products and the way it positions itself and that’s very, very good news. The important thing here is will we get support in the Parliament from Labor? Fourteen times they opposed it. Now is their opportunity to do the right thing by those hardworking small businesses and households who deserve a better deal on energy.

SABRA LANE: Mr Taylor, thanks for joining AM this morning.

ANGUS TAYLOR: Thanks Sabra.