MELINDA JAMES: So much talk and focus on the energy sector at the moment, of course, with the Eraring announcing its early closure, or Origin Energy announcing the early closure of the Eraring Power Station last week. And then this quite surprising and audacious bid by Mike Cannon-Brookes and Brookfield, a Canadian company, to take over AGL. A move that's been rejected by the board, but as we heard from Mike Cannon-Brookes earlier this morning, it appears that that consortium will continue to pursue the deal. There are some hurdles it would need to get over. Look, interestingly, joining me now is Angus Taylor who happens to be in Wollongong this morning, the federal Energy Minister and, of course, the Member for Hume as well. He will be speaking at today's Illawarra First Energy and Renewables Summit at the University of Wollongong, and he's been good enough to give us some time this morning. Angus Taylor, good morning to you.

ANGUS TAYLOR: Good morning, Melinda, and thanks for having me.

MELINDA JAMES: Let's talk first of all about this, yes, rather audacious, as it's been characterised several times now, bid by Mike Cannon-Brookes and Brookfield. We've heard that the PM says he would seek ways to veto this takeover bid. It looks like Mike Cannon-Brookes is pretty determined to pursue it still. It has to be approved by the Foreign Investments Review Board is my understanding because Brookfield is a Canadian company. But if it's given the tick by the Foreign Investment Review Board and AGL shareholders agree to it and see it as value for money, is there anything the federal government can do to stop it?

ANGUS TAYLOR: Well, there are many hurdles to get through. It's got a long way to go. And, you know, it's a private transaction and should be viewed in that way. But it does have to get through all of these hurdles. It's seeking to get board approval then shareholder approval. It's got to get ACCC approval, which is a significant issue because Brookfield is the 80 per cent participant in this deal, so it's by far the majority of the money, and it owns AusNet, a major transmission company in Victoria.

MELINDA JAMES: In Victoria, yes.

ANGUS TAYLOR: So there are significant ACCC hurdles to get over. Then the Foreign Investment Review Board. So all of those things have got to be done. So we've got a long way to go here. You know, we shouldn't be jumping the gun. What I would say is this, Melinda – we've been absolutely focused on affordable, reliable energy for Australians as we bring emissions down. The result of that is we've seen sharp reductions in price – around 8 per cent for households, 10 per cent for small businesses, and even more for large industry, over the last couple of years. We want to see those lower prices continue. That's crucially important. And to do that, if someone's going to take generators out of the market, whatever form they are in, they need to be replaced with like-for-like capacity. We've been very clear on that. We expect that to be the case with Eraring. We expect that to be the case with AGL. And, indeed, we made that very clear to AGL when they made the decision to close Liddell, and the result of that is new gas generators being built, including one in the Illawarra at Tallawarra, of course.

MELINDA JAMES: Yes.

ANGUS TAYLOR: So that is the crucial point – affordable, reliable energy is something we rely on for our industry, for our steel making, for aluminium production, for small businesses as well, and that's not something we'll step back from. We've been able to achieve all of that at the same time as reducing emissions by over 20 per cent. So this is a really stunning track record of Australia. We want to keep this going, and we think we can. But the balance has to be right, and shareholders, whoever they might be, and investors, whoever they might be, need to do the right thing by Australians.

MELINDA JAMES: Can I draw a distinction between Origin Energy's announcement in relation to Eraring and Mike Cannon-Brookes's proposal with AGL? You said that you were very disappointed with Origin Energy's decision. You said that the company has a sort of social and corporate responsibility to plug the gap that they would be leaving. What actual obligation do they have? They need to give you the required three years' notice before they close down, which is what they've done. But do they actually have any other obligation to plug that gap with other types of energy?

ANGUS TAYLOR: Well, we've put in place the Retail Reliability Obligation, and that means they have to make sure that they've got the capacity necessary to serve customers. We're also driving reforms to establish a broader capacity mechanism, which means they've got to have the capacity in place to serve their customers. Now there's a broader point here, which I've made which you just referred to, which is, you know, companies these days are talking a lot about corporate social responsibility. Included in that social responsibility is doing the right thing by customers. You know, the ACCC is the regulator, but, you know, the companies talk a lot about how they do the right thing in their communities these days. Well, part of doing the right thing is making sure they do the right thing by their customers. We make that point regularly. It's an important point because the customer ultimately is crucially important in any business, but also more broadly important for our communities. If we see the power price go up because an energy company deliberately takes capacity out of the market and doesn't replace it, then workers will lose their jobs. Make no mistake about that, and that is something that's not acceptable to us. We've seen it in the past. Electricity prices doubled when Labor was last in power, and many people lost their jobs in manufacturing. We are working hard to make sure that doesn't happen again. And everyone has an obligation to play their role in making sure we get the right outcomes.

MELINDA JAMES: So I guess this is the distinction I wanted to draw. With Origin Energy and its early withdrawal of the Eraring Power Station, I'm making the distinction with Mike Cannon-Brookes' proposal, which is to close the AGL plants much earlier than was initially forecast. But on top of that, I mean, Origin Energy left because they said it's an economic imperative - it's becoming too costly for them to continue to operate Eraring beyond the next three years. Mike Cannon-Brookes says: "We'll close these coal-fired power plants and we'll invest $20 billion to plug that gap." His business plan is actually to do both. He thinks it makes economic sense for him to replace the energy he'd be withdrawing. He says prices would be lower for consumers. To the layperson, that seems like actually a great opportunity to have him interested in pursuing this as a business plan to supply more affordable energy and replace the energy that he takes away through the coal-fired power plant's early closure.

ANGUS TAYLOR: Let's be clear here, that 80 per cent of the money is coming from Brookfield. And so they are the critical financier. It's their plan that is crucially important. Now we haven't seen a plan from anyone with any detail attached to it yet. And, you know, we hear a lot about–

MELINDA JAMES: But if that was to be the plan, wouldn't that be a great opportunity and wouldn't that be a win-win for everybody, if that was, in fact their plan – a $20 billion investment in plugging the gap that they create?

ANGUS TAYLOR: Melinda, we will always, we will always welcome initiatives that bring down power prices and bring down emissions at the same time. But they've got to be real, and we haven't seen a plan. We look forward to seeing a plan, by the way. But we haven't seen one. You know, talk is okay, but real plans that do real things with real money behind them with real outcomes is what we always want to see. The energy sector, there's lots of people - and this is not specific, I'm not referring to Brookfield's bid in this but more generally – there's lots of people with lots of ideas about how they can deliver lower emissions and lower prices. And that is good. We want people talking about that. But delivering is what really counts. Talk is cheap, and outcomes are what we really need. So we look forward to seeing any plan that comes forward from Brookfield. We haven't seen one yet. There's been no detail. The detail counts.

MELINDA JAMES: I'm just wondering, BlueScope's half-year profit that was released yesterday shows the company is really going gangbusters due to demand for its product, but there will come a time when BlueScope as a steelmaker using traditional, conventional forms of steelmaking that are highly polluting, that the company will come under enormous and increasing pressure to accelerate its moves towards green steel production. Would the government consider financial assistance for BlueScope steel to accelerate that? Because we hear constantly of blast furnaces closing in Europe, of some of the strides that are being made in northern Europe and other parts of the world in relation to green steel.

ANGUS TAYLOR: I don't think BlueScope needs any such subsidies at the moment. It's doing extremely well. And, of course, part of what's supporting that is we're seeing energy prices in Australia which are substantially lower than in other countries in the world. Our gas price is about a quarter of what we're seeing in Europe and Asia right now, which is an extraordinary outcome. Our electricity prices have come down. BlueScope is doing a marvellous job. The team there I know have been doing fantastic work to strengthen that business and we applaud that and welcome that. In terms of research and development as new technologies are developed, absolutely, I mean, we've committed $21 billion to technologies - technologies, not taxes, because that's how we're going to get emissions down without raising the price of electricity. We've committed $21 billion to good projects in this area in the coming years, and we will partner with industry that has good projects that allow us to pioneer, develop new technologies. There's lots of risk in developing new technology, and we understand there's a role for government to play in that. We're playing that through ARENA, through the CEFC, through the Clean Energy Regulator, and we'll continue to. We'd very much like to work with BlueScope and others in not just the steel industry but aluminium industry, other heavy manufacturing that's energy intensive, and we'll absolutely do that. But, I mean, I welcome the fact that BlueScope is in a strong position. I should say, Melinda, the first job I had from leaving university was down at Port Kembla at the steel works. So I follow very closely and I'm delighted that things are going well there, because there's been tough times at those steel works over the years, and we would very much like to work with them to get lower emissions steel moving as quickly as we can.

MELINDA JAMES: Just finally, you're going to say in your speech that long-term goals are important but the focus must be firmly on the road in front of us. You say: “There's no point planning for a green steel or aluminium industry if high energy prices decimate the industries we have today.” But I'm wondering, would you seriously advise a young 20-year-old to go into, say, the brown coal industry? I'd advise my son to become a sparkie, I think, an electrician so that they were skilled up to deal with the future that I see in front of my son or daughter. Would you seriously advise someone who was young to go into the brown coal industry?

ANGUS TAYLOR: Well, I think the mining industry has a fantastic future in this country, no matter what commodity you're mining. And, of course, there's skills across all mining sectors that are extremely transferable. I mean, look, the idea that, you know, traditional industries in Australia like agriculture and mining are industries you should avoid is just wrong. We are going to need – we need to eat, we need to mine - it is crucial for our capacity to provide the things we use every day – our iPhones, our cars, our aeroplanes, our houses - all of that requires people who know how to mine. Now, you know, there's no question that the mix in our mining sector will change over time. That is very clear. But it is an industry with a great future, an important future and a crucial role for the world. And these traditional industries in Australia, lots of people like to talk them down, Melinda, but they are great industries. They're doing extraordinary things. Technology will help to bring down the emissions in these sectors over time. And I'd strongly encourage people to get involved with these wonderful traditional industries that are the backbone of this great country.

MELINDA JAMES: Angus Taylor, we'll have to leave it there. But thanks very much for your time this morning.

ANGUS TAYLOR: Good on you. Thanks, Melinda.

[ENDS]