TICKY FULLERTON: Minister, thank you so much for joining us. Now, big announcement from the Prime Minister today - what is this Climate Solutions Fund and is it not just a rebranding exercise for the Emissions Reduction Fund?

ANGUS TAYLOR: No, it is much broader than that. The package actually includes a range of initiatives Ticky, including a strong focus on energy efficiency initiatives, hydro initiatives which are badly needed in the grid right now where there's an enormous amount of intermittency coming into the system. It also includes an extra $2 billion of funding for the ERF, the Emissions Reduction Fund, which has been a phenomenally successful fund, a very low cost way of abating carbon. It's averaged about $12 a tonne, which by domestic or international standards is near unrivalled. So that is an important part of the package, but the entire package puts us in a position where we can be very, very confident that we're going to reach our 26 per cent emission reduction obligations and it's an important part I suppose of demonstrating the credentials of this Government on targets, international targets, which are strong by comparison with other countries. The contrast is Labor with a 45 per cent target which we think is ridiculous, unachievable and will have very significant impacts on business and enterprise in this country.

TICKY FULLERTON: Okay. Aren't though Australians entitled to be a little cynical about this move? I mean, after all, the Prime Minister has said in the very recent past that you should be able to reach the emissions targets that the Government set in a canter. What's changed?

ANGUS TAYLOR: Well we're going to reach our 2020 Kyoto targets in a canter - over 360 million tonnes over and above the targets for Kyoto and we're confident that we'll reach the Paris targets in a canter as well because of these initiatives.

TICKY FULLERTON: But isn't this, isn't this response more as a result of the rise of say Kerryn Phelps and indeed, Zali Steggall?

ANGUS TAYLOR: No, this is just sensible policies which are very, as you rightly pointed out, they're similar, not the same, but they're similar package to policies which have worked in the past in terms of achieving Kyoto. Look, there's very few countries in the world that can claim what we claim with respect to Kyoto. We have here in the announcement today, a similar package of policies that will get us to the 26 per cent target using proven policies that we know are going to work Ticky, and we make no apology for that. They're low cost policies, they'll have minimum impact on the economy and the contrast is much higher targets, which we think are completely inappropriate, well beyond what other countries are doing. The Prime Minister was very clear that those are unacceptable targets and they will be a wrecking ball for the economy, as the Business Council itself has pointed out.

TICKY FULLERTON: All right. Well let me go to something which some companies in Australia in the energy sector feel is a wrecking ball, but that you're throwing around, and that is over the Default Market Offer, which now, as a result of the Australian Energy Regulator is now a cap as everybody feared.

ANGUS TAYLOR: Well it is a cap for standing offers, and let's be clear about this - less than 20 per cent of households are on standing offers and about 20 per cent of small businesses are on standing offers. So it's a relatively small proportion of the market that's directly impacted by that cap and there's no cap on market offers, Ticky. But what there is here is also a reference price which will make it much easier for customers to choose. Now, it's true that if you're a big energy company, competition doesn't necessarily help your bottom line - that's the reality - but we want competition, we want a fair deal for customers. We want customers to be able to compare the offers that they see across multiple companies. Apples for apples. A 20 per cent discount should be comparable with a 25 per cent discount, versus the same benchmark, the same reference price. That's what this does and it does cap for those relatively small proportion of customers. Although, you know, it totals up about a million overall, but that relatively small proportion of the market it does provide a cap, and the reason is they are the most vulnerable customers, they're the customers who are not in a position to shop around or simply don't have time to shop around. We have seen, in the four years between 2014 and 2018 in Victoria, for instance, a doubling of the premium charged to those customers. Now, as Rod Sims at the ACCC pointed out, big companies could have done the right thing themselves on this. They haven't, so the Government has acted.

TICKY FULLERTON: What about the argument - because I think some energy companies would argue this is not increasing competition - this is intervention. What about the argument this will reduce the discount offers that already exist and that, in a way, this will hit people who really are struggling and their struggle has forced them to look for the discounted offers, and you're actually going to be hurting the one lot of people who really have tried to get lower prices?

ANGUS TAYLOR: We disagree with that and the ACCC strongly disagrees with that. The ACCC is the one that made the recommendation to go down this path. They used the comparison of the UK market. In the UK market, 60 per cent of customers were on standing offers. That's not true here. So, it's a very different market in the UK. We think this is completely appropriate. Look, at the end of the day, Ticky, what we've had in this market is customers getting offers from different companies that are completely incomparable. You couldn't compare one with the other and they're designed to confuse. What we're doing here is making it simpler for customers to choose. Now, it's true that mightn't be good for companies' bottom line - the big energy companies' bottom lines - but it's fair and it's appropriate, given some of the marketing tactics that have been used in the past, which are completely inappropriate.

TICKY FULLERTON: Angus Taylor, why did you react so, almost viscerally, to AGL's results this half year? I mean, yes, they made a profit. You said: "Australians should be outraged".

ANGUS TAYLOR: Because the companies should be doing the right thing. We shouldn't have had to do what we've done here. It's not like they're selling iPhones. These are not products that are innovative, new, there's not a massively growing market - the sort of circumstances where you expect rapid profit growth - it's not one of those circumstances. The ACCC has pointed out very clearly that the conduct in this market has been unacceptable and unsustainable - their words, not mine - unacceptable and unsustainable. The right thing would have been for the companies to see that and to step in and sort it out. Well, they haven't. And that's the disappointment for me, Ticky, is that it is very clear this market hasn't worked as it should of. The disappointment for me is the companies actually haven't taken it upon themselves to fix it. In a modern environment, I think, you know, focusing on the customer and doing the right thing is absolutely appropriate, and if you don't do that, some combination of competitors and regulators will do it to you. And I think-

TICKY FULLERTON: But you of all people understand the complexity of running a business.

ANGUS TAYLOR: Yes.

TICKY FULLERTON: Now, on that day, AGL shares, I think they dropped 5 per cent. The company warned that the second half - you know, there are two halves in a year - would be much tougher, there'd be more upkeep costs on power stations, there'd be lower gas sales. We all know that, you know, profits can happen in one half and then, you know, full year can be quite different. I'm just wondering are we getting to a stage where really, between Labor and the Government in this election campaign, it's really who gets the Oscar for bashing business more? Is it actually a situation where particularly customer-facing businesses really can't be making too much of a profit, period - doesn't matter whether they make that profit from being more competitive or more efficient, they just can't be seen to be making a big profit?

ANGUS TAYLOR: No look, Ticky, this is a very specific market. I've spent my career in business, as you know, so, you know, I know what good behaviour in a market is and I know what bad behaviour in a market is. Generally speaking, businesses in Australia do the right thing. They really do. They do the right thing, but this is a circumstance where the ACCC itself has come out very strongly in a very strong report and said: the behaviour is unacceptable and unsustainable. As I said earlier, it's not as though there's been a whole lot of innovation or new products or services that are driving the profits here - there's just been price hikes. There's just been price hikes. Now, this is a service which is different from most - it's bought by almost every Australian. It's a very basic service, it's one we all rely on - and there's a special responsibility here, particularly when you remember that three players in each market control at least 70 to 75 per cent of those markets. There is a sense of responsibility that needs to be carried in this market that is different from some others, or many others, and that's the point I make privately and publicly to the companies: there needs to be a response to this ACCC report and, as I said, we've decided to act on the default market offer and the reference price - two initiatives that we announced on Saturday. The energy companies weren't doing it themselves, so we've stepped up.

TICKY FULLERTON: Finally, can I ask you, Minister, basically, you haven't got your big stick legislation through - you chose not to because of the amendment that involved coal. When it comes to your underwriting of the new generation investment plan - which could, I understand, include a new coal-fired power station, potentially - how is that going and is this idea of a backlash, you know, of the Australian Institute says you could be open to constitutional challenge at the moment in terms of your powers to deliver it?

ANGUS TAYLOR: Well, let me just pick you up on something you just said a moment ago. The legislation that we've put, has been introduced to the Parliament, has been voted on a number of times, and is still on the notice paper. We would like to get it through before the election, but 11 times, or 12 times, Labor has voted against it. We want to see it go through - it's based on recommendations of the ACCC around market manipulation and closing down of critical markets. It's dealing with those issues that the ACCC identified and recommended on, so we want to see it through.

TICKY FULLERTON: But they didn't recommend you use a big stick like this, did they?

ANGUS TAYLOR: Well - but the problems that were identified in the ACCC report and which they recommended we act on are what this legislation is about. Now, the big energy companies don't necessarily want to admit that, but the ACCC recommended we act on market manipulation, that we act on the closing down of the market, the barriers to entry that have been created, for instance in the South Australian market. Coming back to your second question, which is the underwriting new generation: the ACCC recommended that this be a technology agnostic approach, that we shouldn't focus on any particular fuel source, we should focus on dispatchable power, bringing new reliable generation into the market at a time where we're seeing record investment in intermittent power. We are following the approach recommended by the ACCC and we're confident it's constitutional, we'll have the legislative authority we need. We got 66 proposals come forward, an enormous amount. There's great interest in investing in this industry, Ticky, despite claims by some to the contrary, and we're working our way through those proposals as quickly as we can. It's a lot more than we expected, so there's real work to be done as we work our way through them.

TICKY FULLERTON: Well, that is good news. Minister Angus Taylor, I'd like to thank you so much for taking the time.

ANGUS TAYLOR: Thanks, Ticky.