LEON BYNER: According to the ACCC, and this has just come out a moment ago, there are $900 million in electricity bill savings - this, of course, is nationwide - available to you. The ACCC tell us that retail electricity offers now available, including in South Australia, are at least 8.8 per cent lower than they were in June 2020. But I bet you're going to ring and tell me: ‘Well Leon, I haven't seen it.’ So, let's speak to the bloke who can tell us why and how that's got to change. It's the Federal Energy Minister, Angus Taylor. Angus, good morning.

ANGUS TAYLOR: Good morning, Leon. Thanks for having me again.

LEON BYNER: Is it going to be up to the consumer to push the envelope on this?

ANGUS TAYLOR: Well, it always helps. If you are on a default market offer, which is what you get if you don't ring up and ask for a better offer, you will have seen a significant reduction in the last couple of years, indeed, already. However, if you're not, then obviously you've got to ring up and ask for a discount. And of course, what we're seeing right now and this is reflected in the ACCC's report that's just come out, is very significant savings for consumers who are able to ring up and ask for a better deal. The best way to do that is to shop around a bit, but even if you haven't got time to do that, just ring your existing provider and say: ‘Hey, I reckon you're giving me a dud deal, I'd like something better.’ The chances are you will get exactly that. There are some very good deals around. Now is a great time to pick up the phone and call and ask for a better one. The other way of doing it is to go onto the Energy Made Easy website and you can actually get a plan there that's customised to your needs and your usage. The CSIRO has done work with us to get the algorithms right, all the maths right, so that you can put in your usage or even put in your bill, and it will then tell you, given your usage, what the best plan is for you. 

LEON BYNER: Well now, the ACCC say that the average amount that this is worth in dollars is about $126 a year. So presumably, if you ring your supplier, the one you've got now, the worst you're going to do is drop it by $126. Is that right?

ANGUS TAYLOR: Well it depends on your starting point. I mean, if you've already got yourself on to a good deal, you're obviously not going to get much more than that. But if you haven't rung, then you will get a saving. There's no doubt about that, particularly if you shop around and go to multiple providers. The saving you'll get will depend on the size of the bill. So, the bigger your bill, the bigger the saving, obviously. If you're a small business, your savings will be much higher than that number you just quoted, typically. 

LEON BYNER: A lot of people wouldn't know that there's a thing called PEMM - P-E-M-M - which is Prohibiting Energy Market Misconduct. Now these laws came into effect in June of last year. 

ANGUS TAYLOR: That's right. 

LEON BYNER: They require, as I understand it, retailers to make reasonable adjustments to their prices. So, if you ring, you should at least get $126 and you might get even more?

ANGUS TAYLOR: Yeah. Look, if you've got a very small bill, you won't get that much because it's a percentage reduction that we’re seeing. But there are significant savings there - and I don't want to, everyone will have a different bill and different usage patterns - but there's very significant savings there. The most important thing of all is just to ring and ask for a better deal or go to an alternative provider and ask for a bit of a deal. Or best of all, as I say, go to the Energy Made Easy website.

LEON BYNER: This is all retailers who are selling power to you, this applies to?

ANGUS TAYLOR: Yes, that's right. Exactly. 

     

LEON BYNER: Yeah, and again, it's up to the consumer to make the call?

ANGUS TAYLOR: We are protecting consumers who don't make a call with a price cap that came into place a couple of years ago. That means that they're getting a better deal than they were getting by putting this price cap in place. And that's particularly important in South Australia, in fact. But you're still not going to get the best offer with that price cap. You can get a better offer by picking up the phone and ringing, and that's why it's so important people do exactly that.

LEON BYNER: While I've got you there, Angus, as Energy Minister, you'd be aware that an anti-corruption advocate has warned that political donations are undermining public confidence in plans for a gas-fired economic recovery. What's your observation on this?

ANGUS TAYLOR: I am influenced, and the government is influenced, by what is right for the people of Australia. And certainly in my portfolio, it's about getting energy costs down, keeping the lights on, and bringing down emissions while we're at it. People can donate whatever they like to political parties, but that won't change our focus. That's the right focus for Australians. We've had it for a number of years. It's been my absolute focus as Minister and you won't see me diverge from that for any reason whatsoever.

LEON BYNER: The public would be aware that there's been a degree of tension between the Australian Energy Market Operator and also the government. What's been the point of contention? It's reported that the unfavourable nature of prospects of gas-fired powers growth was the issue. Was that right?

ANGUS TAYLOR: No. The issue was egregious, forecasting errors. 

LEON BYNER: What does that mean?

ANGUS TAYLOR: AEMO has got its forecasts badly wrong on several fronts. The most notable is that they have consistently under-forecast the amount of gas we need in the system. We need far more gas than they thought. Their forecasts have just been factually wrong many times, and that's a problem. I've been, you know, I've been particularly exercised by that because we've got to get these things right. The second error they've made is they have underestimated the uptake of household solar. That won't be a surprise to anyone in South Australia because you've seen record levels of household solar in South Australia. It is so far wrong. Their forecasts are about a third of what has actually happened. So, they forecast about a gigawatt of household solar - it's been three times that amount in Australia for two years running. So, you know, they've got to get these things right. They matter. They really count, to get our forecasting right, because if we don't get our forecasting right, then the system will have the wrong balance in it and the lights won't stay on and the prices won't go down. So, you know, it's an important issue for me. I have to hold agencies to account to make sure they're doing the right thing by Australians. That's my job as a minister and my department's job and we'll continue to do that.

LEON BYNER: Are the gas suppliers overcharging us?

ANGUS TAYLOR: Look, the gas price has got to come down. And in fact, in wholesale terms, it has been coming down quite dramatically.

LEON BYNER: But we don't pay the wholesale, we pay the retail.

ANGUS TAYLOR: No, that's right. And so, we are starting to see that passed through now as we saw this, exactly the same pattern with electricity. And we want to see those gas prices being passed through to consumers- 

LEON BYNER: Why isn't this happening quicker?

ANGUS TAYLOR: Well, it is in some areas. So, if you look at the electricity prices, it is clear that electricity generators are now getting those lower prices and that's showing up in electricity bills-

LEON BYNER: But the customers have got to get it if they’ve got gas. 

ANGUS TAYLOR: Well, in fact, gas is hugely important for the electricity price. But it's true, as you say, Leon, it's also directly used by people to cook their food and heat their water and so on. 

LEON BYNER: But why isn't their price coming down quicker?

ANGUS TAYLOR: Well, it needs to. It needs to come down quickly and we'll continue to focus on this.

LEON BYNER: Why isn't the - my point is this.

ANGUS TAYLOR: Yes.

LEON BYNER: Why hasn't it come down?

ANGUS TAYLOR: Look, the wholesale price has only been coming down sharply in the last 12 months or so. Just before COVID hit it began. So, it is time- 

LEON BYNER: They’ve had a year to drop them. 

ANGUS TAYLOR: Look, and you make a good point and we'll be all over this, making sure that we see this passed through to customers. We are actually working through right now a code of conduct with the industry to make sure that they do the right thing. You’ll remember we put that legislation in place for electricity a couple of years ago. We think it's having a real impact. 

LEON BYNER: Are you telling us that the gas suppliers have no code of conduct?

ANGUS TAYLOR: No, they don't, and that's why we're putting one in place.

LEON BYNER: But this could have been done ages ago. 

ANGUS TAYLOR: Well, we're doing it now. Look, that there are other mechanisms that have been in place and they have had an impact, Leon. There's no question about that. But we need to have an industry code. We are working through that now. It is high priority work and we want to see it passed through.

LEON BYNER: Alright.

ANGUS TAYLOR: But, you are right to raise it as an important issue.

LEON BYNER: As the Energy Minister federally, by how much should have we had a saving on gas. Do you have any idea?

ANGUS TAYLOR: There's been something like a halving of the wholesale price. Now, to put this in perspective, every customer is a bit different, depending on how big you are, but the wholesale price will typically make up a third of the overall price. 

LEON BYNER: So at least a quarter? Or 33 per cent?

ANGUS TAYLOR: Not quite that much, but there's a significant reduction up for grabs here that needs to be passed through and we want to see it passed through.

LEON BYNER: So, unless you cajole, we may not get it?

ANGUS TAYLOR: Well, you know, sadly, in energy, it has taken cajoling from people like myself to do this and cajoling has been shown to work. And so, we're doing it again. And, you know, that's my job and I'll keep doing it every day, Leon. And you're right to raise this issue today. 

LEON BYNER: All right. So, in general terms, how much less should our gas be?

ANGUS TAYLOR: As I say, the wholesale price has halved. We expect it to come up a fraction from that but not a whole lot. 

LEON BYNER: Yeah. 

ANGUS TAYLOR: But you know, then that's about a third of the typical retail bill. But, look, if you're a very big customer, you know, manufacturing - and this is hugely important for jobs in South Australia and right across Australia - it'll be a much bigger reduction than just, you know, 5 or 10 per cent. We're talking a very substantial reduction in gas prices. We are starting to see that flow through now and that's the good news, but we need to see it flow through much more broadly. 

LEON BYNER: Angus Taylor, thank you. That's the Federal Energy Minister.

Media contact:

Minister Taylor's office: 02 6277 7120