ABC 891

E&EO TRANSCRIPT ABC 891 Breakfast with Matthew Abraham and David Bevan 11/6/2014 MATTHEW ABRAHAM: Looking at politics and you, a lot of what happens you think oh that’s just politics, but what happens if it starts affecting things such as your solar feed in tariff, or if you’re considering putting in solar panels. Decisions that are made could trickle down to you very, very quickly. Chris Pyne is Liberal MP for Sturt; he’s education minister, and leader of the house. Welcome to the program Christopher Pyne. CHRISTOPHER PYNE: Good morning Matthew. MATTHEW ABRAHAM: And Mark Butler, Labor MP for Port Adelaide, Opposition Environment and Climate Change spokesman. Welcome Mark Butler. MARK BUTLER: Good morning. MATTHEW ABRAHAM: Now we know there’s a federal review going on, into the renewal energy targets, and I noticed the latest report, it shows some cautious optimism. This is according to the ABC’s environment reporter, Greg Bourschman, saying that: “Despite the fact that self-professed climate change sceptic and pro-nuclear advocate Dick Warburton is heading up the review, of the renewable energy targets, there are, there’s some optimism that it won’t be tampered with too much I suppose. Shouldn’t probably use the word ‘tampered with’ I suppose – ‘changed’? ‘Reformed’? ‘Fixed’? Um, Mark Butler, what would that mean if the renewable energy target was scrapped, in terms of people – particularly with solar panels? MARK BUTLER: Well, for people with existing solar panels it wouldn’t affect their panels directly. For people who wanted to put solar panels on their household it would have a significant impact, it would very significantly price solar panels out of the market for many, many people. And that’s why there are so many people very concerned about this review. It’s also clear though, that the expansion in renewable energy is having a downward effect, a suppression effect on wholesale power prices. So, some of the reports I’ve read over the last few weeks indicate that if the renewable energy target is slashed, then wholesale power prices over the next few years would be higher than they otherwise would be. This is particularly – MATTHEW ABRAHAM: Is that because they’re still locked into paying on state-based schemes which have all been closed down largely now, paying consumers who have solar panels a feed-in tariff. If you don’t have to meet the target, you’re still committed to paying those. MARK BUTLER: Well that’s a matter for State Government. So at the moment, you still – the retailers are still committed to paying the feed-in tariffs for people who, say put solar panels on several years ago. When solar panels were very expensive and they got quite a generous feed in tariff for that, the Western Australian Premier for example tried to take the feed-in tariffs away from those legacy households and there was a mini revolution over there and he backed down. So, that ultimately is a matter for state governments, but, but fiddling with the renewable energy target, which is what the Federal Government is looking at doing, will have an impact on future power prices and also will have an impact on the attractiveness, or the viability of, other households that currently don’t have solar panels on their roofs, putting them on their roofs. MATTHEW ABRAHAM: Okay, because you’ve got two things going on here. You’ve got the Commonwealth, which is setting a renewable energy target, and that’s requiring generators to produce a certain amount of renewable energy. And then you’ve got the state parliaments, which in previous years have tried to encourage people to take on the solar panels so it’s offered these generous tariffs. What you’re saying is that if you signed up early, because it’s a State thing, and it’s locked in, you won’t be affected. But if, say Joe Blow is saying “I never got around to it, I will do it now” he might be less likely to put a solar panel on his roof, because the renewable energy target has been reduced, and the power companies aren’t interested in buying his power. Is that what you’re saying? MARK BUTLER: Well it’s not buying his power as much, as it is that the support for putting panels on the roof will have gone. So the panels will be much more expensive, and households will make their own judgement about whether it is still worth doing. The other thing for households, is that MATTHEW ABRAHAM: Why would the cost of a panel go up? MARK BUTLER: Well, no, because there is currently support through the renewable energy target, and probably worth a couple of thousand dollars, for a household to put panels on their house. So if you have a look now the advertisements you can probably put a set of panels on your house for three, four, five thousand, depending on what sort of scale you want, what size of house you want – MATTHEW ABRAHAM: But isn’t it a rip off? I mean when there was a full, Federal Government subsidy in place under the Gillard Government DAVID BEVAN: They cost a fortune! MATTHEW ABRAHAM: The same system was about $20,000. As soon as the subsidy was removed the panel prices miraculously dropped about 4000. Suddenly the Chinese had all these panels. Chris Pyne, if we can come to you, because I’m sure you’re champing at the bit here – Liberal MP for Sturt – does the Federal Government have a dim view of the renewable energy target? CHRISTOPHER PYNE: No I wouldn’t say we have a dim view of it. I would say that firstly I can’t comment on the state government’s subsidies for solar panels. I would say that there are some people that argue because the renewable energy target is a, is not a market-based target, but is in fact an imposed target by the commonwealth government it artificially forces up the prices of electricity, because it heavily subsidises wind farming and solar power etc, and that if that target wasn’t in place those subsidies would make wind farming and solar panels not economically viable. That’s what some people argue. We’ve asked Mr Warburton to investigate the impact of the renewable energy target, because obviously for a lot of people, a lot of South Australians, who can’t afford solar panels, certainly can’t afford a wind farm in their back yard – there’s an argument that it’s not fair that their taxes are subsidising those people who can, by forcing up the price of power because they have to subsidise wind farming and solar panels, so that’s why we need to have an investigation into it. MATTHEW ABRAHAM: Chris Pyne it becomes very confusing because you’re saying these renewables have forced up the cost of power. But Mark Butler is telling us well if we don’t have more of them, the price will go up. That, that he’s saying that renewables have started to deflate the cost of power. CHRISTOPHER PYNE: Well, the truth is that Australia has an abundance of coal, and the cheapest way of producing energy in Australia is by coal fired power stations. Now coal fired power stations are obviously very much out of fashion at the moment, and there’ve been attempts in the past few years, particularly by Labor Governments, to reduce their effect on the economy and promote renewables. One of the ways they did that was to put an artificial renewable energy target into the economy, into the market which would force people to use a certain percentage of renewable energies. Now on anybody’s books whether you like, support that or not, whether you want that kind of intervention in the market or not, it certainly has an impact on prices, because it makes hither to uneconomic energy producers like wind power, economic because it forces up the price of energy prices. MATTHEW ABRAHAM: One of the points that Christopher makes – talking about ‘us’ doing it ‘labour’ doing it. The first renewable energy target was John Howard’s, and for the last four elections the renewable energy target has been a completely bi-partisan position. Christopher Pyne – MATTHEW ABRAHAM: And there’d been four reviews, correct? MARK BUTLER: Yep – Christopher Pyne’s colleague went to the election during the campaign and said that the existing renewable energy target would be, would be supported by an incoming Coalition government. This is partly why the renewable energy sector is up in arms, because they thought this election, the renewable energy target was a bi-partisan position, and the government, as in so many other areas, appears to have changed its mind. CHRISTOPHER PYNE: No the government hasn’t changed its mind, and there is no proposal to change the renewable energy target MATTHEW ABRAHAM: Well, we’ll see CHRISTOPHER PYNE: So you don’t have to be a near hysteric about it, there is a review of it, which is perfectly sensible, that a federal government should conduct a review, particularly when consumers are facing increasing electricity prices and you continue to block the abolition of the carbon tax in the senate, in spite of the fact that you lost the election last year. MARK BUTLER: Well the evidence doesn’t show that power prices go up because of the renewable energy target, if anything CHRISTOPHER PYNE: What about the carbon tax? MARK BUTLER: Particularly because of, particularly because of what happens during heat waves, where the really expensive power comes onto the market, solar panels are are suppressing the price of power very, very significantly, that’s quite clear. MATTHEW ABRAHAM: lets, lets go CHRISTOPHER PYNE: Why do you continue to block the abolition of the carbon tax in the senate in spite of the fact that you lost the election last September and that was the key issue? MATTHEW ABRAHAM: Let’s go to Richard from Inwood. Now Richard – sorry, Richard Inwood – now, you are the manager of a business that makes solar panels? RICHARD INWOOD: Yeah – ah – morning, morning David, and Matthew, and gentlemen – look the thing though, instead of on the back of what we were advised as long term, federal government policy. So three of us have put $6 million into Australia’s only manufacturer of solar panels – based down at technology park – and for us, let’s leave some of the politics aside, for us and for the federal and state government they are – I think both though – are very supportive of what we are doing, which is creating brand new, high tech, high skilled, high quality manufacturing jobs, the only sets of it like in the country, with the potential being absolutely amazing, if we were to replace just 20% of what we MATTHEW ABRAHAM: Sure RICHARD INWOOD: bought in terms of panels, 600 manufacturing jobs. That is fantastic for this state and and the overall economy of South Australia, and Australia and that’s the potential that is worthwhile talking about. MATTHEW ABRAHAM: And you’re worried that if the renewable energy targets are changed, your business model – what – starts to look a bit shaky? RICHARD INWOOD: No certainly so we had Dick Warburton and the team at tinder only a week and a half ago and we had a terrific conversation with him and the team and they were very supportive of seeing, you know great examples of what a brand new business, on the back of good government policy, being built and growing well. MATTHEW ABRAHAM: Alright Richard Inwood, thank you. David from the hills has called – hello David DAVID: Yeah good morning gentlemen, how are you all? MATTHEW ABRAHAM: Very well. DAVID BEVAN: Last week I put up a 5kW system with 20 panels on, purely to reduce my power bill, got it out at an absolute bargain price at $4399. My neighbour four years ago bought the same system for $11,000. Now they get a larger tariff than I do, and I’m not in it for the tariff, just for power reduction, but the company that put this up, also said that they believe that the government were working on reducing the renewable energy targets and that this same system that I just bought would go up between two and a half and three a half thousand dollars. MATTHEW ABRAHAM: Okay, um, look Chris Pyne just, just coming back on this, and we did want to ask you about Iain Evans’ decision to leave politics, but just coming back to this, are you saying that you’re confident the renewable energy target will not be scrapped? CHRISTOPHER PYNE: Well in fact I visited a Tindo about a fortnight ago, and sat down with Richard, so I have first-hand experience of the very good work that they are doing at Mawson Lakes or Technology Park, and I support very much the promotion of a high quality solar panel industry in Australia. The renewable energy target is a bi-partisan issue in Australia – MATTHEW ABRAHAM: And you are confident it won’t be changed, as a result of this review? CHRISTOPHER PYNE: Well I’m confident that we will do what is sensible and fair for both the consumers and the economy following the Warburton review, but I’m not going to pre-empt the Warburton review which might find ways of delivering renewable energy better, and cheaper and faster. MATTHEW ABRAHAM: Okay are you confident that the liberals can maintain Davenport, when Iain Evans finally leaves the parliament? CHRISTOPHER PYNE: Well, I’ve noticed the hyperventilating from the Premier on the issue of Davenport – I note that labour’s never held davenport, and the only independents that have ever held it have been members of the Evans family, ironically. I would say that I salute Ian Evans’ 21 year career in state parliament and his decision to move on and do something different with the rest of his working life. I think Davenport will be a tough competition, of course every bi-election is, and when he decides to finally to go we’ll see what the circumstances are at the time. MATTHEW ABRAHAM: When you decide to go, shouldn’t you just go? He’s bored with it, he’s disappointed they didn’t win, doesn’t want to hang around. Things he didn’t share with his electorate a few months ago, of course, but… CHRISTOPHER PYNE: You guys can’t have it both ways, I mean you can’t criticize the Liberal Party for not renewing itself and then when it announces it is renewing itself criticize it for renewing itself, so MATTHEW ABRAHAM: So should more go? CHRISTOPHER PYNE: Everyone likes to have their cake and eat it too, but when it happens it should be pointed out to them. MATTHEW ABRAHAM: Should more go? CHRISTOPHER PYNE: Ah – well that’s a matter for my state colleagues. I think Iain Evans has made a decision that suits him and his family, and his electorate. He hasn’t done what Martin Hamilton-Smith did, which was being disappointed about losing the election and deciding to join the other team, we know that they found Sylvia Burgess and McQueen and now we know where the fourth man has been hiding all these years, and it’s been Martin Hamilton-smith. MATTHEW ABRAHAM: (Laughter) Did it take you long to think that one up Christopher? MARK BUTLER: Been working on that one for a week or so? CHRISTOPHER PYNE: No (laughs) MATTHEW ABRAHAM: Just quickly Mark Butler, on this issue of Davenport – it does seem to me that we have a re-invigorated Labour. Labour never expect to win, it was a bit shell-shocked afterwards, but now it’s actually re-found its mojo. And and its its, you’ve got the Premier saying “We’re going to go for seats like Davenport, if not directly through a labor successful campaign, then indirectly through independents.” MARK BUTLER: You’re right. The Premier, his team, experienced members like Tom Koutsantonis, but new members like Susan Close and Steven Mulligan and so there’s a real energy to this team. But certainly the word around Canberra is that Christopher is slowly going through these state Liberal caucus, and suggesting they might want to spend more time with their families, so my only advice CHRISTOPHER PYNE: Oh that’s a lie, that’s an outrageous lie. MATTHEW ABRAHAM: (Laughter) MARK BUTLER: So my only advice is that members of the State Liberal Party should avoid – MATTHEW ABRAHAM: Are you really doing that Christopher Pyne? MARK BUTLER: … luncheon dates with Christopher Pyne CHRISTOPHER PYNE: That is outrageous nonsense. That is just Mark Butler trying to be amusing (Laughter) MATTHEW ABRAHAM: Gentlemen thank you, you’re both amusing. Christopher Pyne, Federal member for Sturt, powerbroker in the Liberal Party, at State and Federal level, and Education Minister. Mark butler, also very influential in the left faction of the Labour Party – State and Federal level, Labour MP for Port Adelaide, Climate Change Spokesman – thank you, for coming into the studio, thanks Chris Pyne. Down the line it’s 10 to 9. [ends]