10 August 2017
Transcript - #2017150, 2017

Interview with Sabra Lane, ABC AM

SUBJECTS: Turnbull Government delivering a better deal on energy prices for Australian families; AUSTRAC civil penalty proceedings against the Commonwealth Bank; same sex marriage

SABRA LANE:

Good morning, Treasurer, welcome to the program.

TREASURER:

Hi, Sabra.

LANE:

The Prime Minister says Australians are being ripped off when it comes to their power bills. So when will the rip offs end?

TREASURER:

Well they need to end now. That was the clear message we sent yesterday. The deck is firmly stacked on the side of the energy retailers when it comes to power bills, and what we made very clear yesterday was that we want to see that change. A key part of that is giving customers greater power over their own bills, to understand what the better deals are because the complexity is the energy retailer’s best friend when it comes to what they can earn on all of this and we want to let the light in on this and let the ventilation in as well so people can make better decisions and achieve the savings on their own power bills right now.

LANE:

But when will that happen? A lot of people are, at the moment in the process of getting their horror bills and seeing how much it’s gone up, when will they actually see those better deals?

TREASURER:

They should be seeing them right now, that’s our point. They should be moving immediately to be communicating with those who are coming off their discounted offers onto just the standard rates, and telling them what the options they have are, based on their past usage. Having this information in the hands of the customer can really power up the customer in how they can get a better deal. When you’re trying to get your electricity prices down you have got to know what your options are and it’s not just about what deal you can be on it’s also about how you can better use energy. I think that’s another challenge for us, to help Australians, and right across the country to better use how they access energy so that their bills can be lower.

LANE:

What was threatened to get their cooperation? The last time we sat down with gas producers for example, you ended up having to threaten them with legislation to restrict exports. What did you threaten this time?

TREASURER:

They’re under no doubt that we expect them to act and if they don’t act, we will.

LANE:

What will you do?

TREASURER:

At the moment they’re acting, so let’s just keep working constructively on that front, but we have some cooperation, I think, from them to provide this information, to work with us on this. That’s what it’s about. You want to get the outcome, if we have to take further steps then we will.

LANE:

These companies, AGL, Origin, Energy Australia – they have about 70 per cent of the market, these companies are in the business of making a profit and they won’t willingly give that away. What happens if they try to make up their margins elsewhere?

TREASURER:

At the end of the day, the most competitive markets are the ones where the customers are strongest, and that’s why putting more information and power back in the hands of families over their power bills is key. That’s why we’re also now moving down the path of, what are the consumer data rights when it comes to people’s own energy records and things like this, we’re doing very similar things in the banking sector with our open banking reforms, and consumer data rights there. Those sectors are not that different you know, they’re big, heavily regulated sectors with large companies where the deck is firmly stacked in favour of those companies. In the Budget, we obviously took steps around the banks, and the executive accountability regime which is coming in, the bank levy and so on. So I don’t think the energy companies are in any doubt that should we wish to move here, we have form in following through on our actions.

LANE:

May there be an energy company levy?

TREASURER:

No that’s not what I’m suggesting. What I’m saying, is that we will take the steps that are necessary and what is necessary is that customers need more power, over their power bills.

LANE:

Many companies say a clean energy target is actually what’s required to ensure certainty and confidence so that they can make investments and get sensible pricing into the future, how will you achieve a target given that you’ve got Tony Abbott saying that this policy is green theology and it looks like he is absolutely determined to kill it off.

TREASURER:

Well, certainty around the regulatory arrangements for energy investment I think is critical and that was a key message that was passed back to us yesterday, but they’re not the only ones saying that. That’s consistent with the advice we’re getting as well…

LANE:

Green theology?

TREASURER:

I’ve been very careful to remove theology and any other ‘-ology’ out of this debate. We’re focused on the engineering and the economics when it comes to this and getting the right answer. As Tony Abbott would have said, “It’s a wicked problem.” It is a wicked problem and it’s one that needs to be solved and we’ll solve it with common sense and solutions that are durable and will provide the certainty that investors need. Because if investors aren’t investing in more energy supply then that can only put pressure the wrong way on power prices. So, we want that supply, we want that investment, and that requires delivering certainty and that’s what the Government is working methodically to achieve.

LANE:

Onto the banks, the Commonwealth Bank reported a profit of just under $10 billion yesterday but it’s the centre of another huge scandal, this time for failing to report suspicious transactions and potentially allowing money to be funnelled through their intelligent deposit machines. What options are you considering against the bank? You met Catherine Livingstone this week.

TREASURER:

First of all, I think it is an epic fail and I think it’s incredibly serious, and at the end of the day, it’s in the first instance that the Commonwealth Bank – and particularly their board – to assure the public about their confidence in that bank. And that is the substance of what was discussed between Catherine and I when I asked her to come to Canberra the other day. Now, the Government also must be very careful not to take any action at this point that could any way frustrate what AUSTRAC is doing in bringing this matter before the courts. So, that is priority one, that AUSTRA’s matter now will be pursued through the courts and we’re not going to give the Commonwealth Bank any leave passes by any actions we might take otherwise. So, we’re keeping…

LANE:

You said all options were on the table – a Royal Commission?

TREASURER:

That’s not an option the Government has been considering and one of the reasons for that is…

LANE:

Not all options then are on the table.

TREASURER:

Well, no, no. There has never been a suggestion that the Government has that as part of its agenda because we’re taking action now, Sabra. A Royal Commission might say, “Increase the powers of ASIC and give them more resources.” Well, we’ve done that. It might say, “Put greater accountability on executives” - which would have been very critical from my understanding of what’s happened in this case with Commonwealth Bank. Well, those laws are coming in when we come back after the sitting. So, we’re already taking the action and action now is what you want on banks. Not kicking this down three years for a lawyer’s picnic for all that period of time and only to recommend things that we’re already doing.

LANE:

Now, the bank board [inaudible] suspicions in 2015 that these so-called intelligent deposit machines might be targeted by criminals. How puzzled are you then that it wasn’t disclosed earlier?

TREASURER:

I’m very puzzled about many of the things that have occurred on this matter and so it will properly be dealt with through the courts. But the issues around governance and issues around culture, these are also very troubling for me and these are the issues that the board of CommBank need to address.

LANE:

You say that they’re troubling – the Government’s put in a number of measures that still, you know, we’ve still got incidents of these things happening.

TREASURER:

And in each case, I think we’ve had a very strong response. The Banking Executive Accountability Regime, this is a significant transformation which holds executives accountable for making decisions like putting in a system like this at CommBank which has had an epic fail and created a very significant vulnerability. Now, under the current law, there are no controls around this. Under the laws I’m bringing in, there will be.

LANE:

Labor’s Penny Wong points out already the campaign for the same-sex marriage vote has already turned ugly. Children of same-sex couples are being described as a ‘stolen generation’. How comfortable are you with that quality of debate?

TREASURER:

Well, we promised the Australian people a say at the last election and we’re giving it to them…

LANE:

But that sort of thing has been thrown around now, are you comfortable with that?

TREASURER:

I have confidence that the Australian people in the broad will engage in this I think in a very responsible and respectful way. There are any numbers of debates that are out there when you get this sort of commentary, on any debate – on the energy debate, on this issue…

LANE:

What do you think about it?

TREASURER:

I’m not participating as a political activist in the plebiscite…

LANE:

But you’re not commenting specifically about that claim. It’s pretty ugly.

TREASURER:

Look, ugly statements I have no truck with but we’re giving the Australian people a say and I don’t think we should be intimidated about giving the Australian people a say on this. I think the vast majority of Australians will conduct themselves in a very respectful way. But on both sides of this debate I have no doubt that people will say some things that they shouldn’t. That’s an open democracy where people can voice their opinions. We promised them their say, they’re getting their say, and I look forward to that being conducted in a very professional way, and then we move to the next level.

LANE:

Treasurer, thank you for talking to AM this morning.

TREASURER:

Thanks, Sabra. Good to be with you.