E & O E - PROOF ONLY
HOST: Prime Minister, good morning and thank you for giving us some of your time.
PM: Good morning John and power prices are on my mind but your birthday's on my mind too, so happy birthday to you.
HOST: Thank you very much, that's very kind of you Prime Minister.
Is this as much about sending a message to the caucus that you're in for the long run, or is it about rattling Barry O'Farrell's cage?
PM: John, it's about the power bills that people around the country are paying, particularly in New South Wales. Before we put a price on carbon, people had seen 70 per cent increases in their power bills - 70 per cent.
That means for families that they've seen hundreds, indeed thousands of extra dollars going out the door in their power bill. Now those kind of big price rises are about some complicated factors but we need to act on them.
One is there's an incentive in the system to keep investing in more and more and more poles and wires, and the more you invest the more the state government earns. That's money straight out of the wallets and purses of the people of New South Wales into Barry O'Farrell's state budget.
I think we need to do better than that and I'm determined to do better than that in December this year when the Council of Australian Governments next meets.
HOST: In your speech yesterday you really gave it to the states over big hikes in power prices over the past few years, but that's a speech - good as it was - but it's a speech you could have made two years ago. Why did you wait until now?
PM: We've been working through our Energy Minister, through Martin Ferguson, on a whole lot of important technical work about what's driving power prices.
But the time to act is coming because the power prices determinations made in the first six months of next year will determine power prices for the next five years. So, the moment to act is now.
We've got the benefit of all of that technical work, which is coming up to us, but we need to make decisions and find solutions this year to affect the power price determination next year.
HOST: Okay, when I was looking at information yesterday, when we went to the website of the Energy Policy Institute of Australia, they'd indicated that the address was going to be given by the Energy Minister, the aforementioned Martin Ferguson. Why did you feel the need to replace him?
PM: I determined to do it because of the importance of this issue, and my real sense of urgency that as Prime Minister, working with state premiers and chief ministers, we have to act in December this year.
So I wanted to send out that message very loud, very clear, and also be very clear with people about what's driving power prices and where some potential solutions are to the increases that we continue to see.
John, to give you just a very simple example, there's a customer framework, a national customer framework which ensures people get better information, more power over their power bills if you like.
At the moment we're waiting for states to endorse that framework and to give people the benefit of a website which helps them understand their power use and moderate their power use. So let's get on with that.
There's no reason why the New South Wales government couldn't act on that today.
HOST: Okay, I'm just interested to know why you felt the need to replace Martin Ferguson. Did you think that you were better equipped to deliver the message?
PM: I wanted to deliver the message as Prime Minister because it's about what we do at the Council of Australian Governments meeting at the end of the year in December, the meeting I attend as Prime Minister with all of the Premiers and Chief Ministers.
HOST: You see even the respected TD Securities price index shows the impact of the carbon tax in just its first month of operation is having an effect. It's found a jump of 14.9 per cent in power prices and a jump of 10.3 per cent I think for gas prices, and they say almost all of those hikes are due to the carbon tax. How do you respond to that?
PM: Well we've always been upfront with people that the impact of carbon pricing on electricity bills was going to be 10 per cent. And it is 10 per cent.
And that's why we've also given people tax cuts, pension increases, family payment increases and for the majority of Australian households that means that they'll end up square or in front.
My concern is the increases we've seen around the country, even before carbon pricing, 50 per cent increases for families, 70 per cent in New South Wales and not one cent of assistance to help people deal with them coming from state governments who are reaping very good dividends out of these power assets.
HOST: Okay, now your own energy regulator, the Federal Government's Australian Energy Regulator, has complained it can do very little to keep prices down. What's the point of having a regulator if they can't regulate?
PM: The regulator has made the point that there's some limits on its powers and it is particularly concerned about the fact that when power companies put forward issues for it to make a determination on, that once it's made the determination then they can cherry-pick which bits they want to accept and which bits they want to appeal.
John, I want the regulation to work. I want it to work for Australian families, I want it to work so we don't, over the next four years, see another 50 per cent increase in power prices.
That's why I gave the speech yesterday. That's why I'm making it very clear what is driving power prices, and it's why I'm very determined that in December we find solutions that make a difference for the prices determinations next year.
HOST: Okay, what should Barry O'Farrell be doing? What would please you the most, not that he wants to please you I imagine, but what would please you the most from the O'Farrell Government?
PM: Well step one he could implement today the customer framework I talked about, so people have more control over their power bills. There's nothing stopping him doing that today John, and he should get that done.
Number two, he should acknowledge the full facts of power prices in New South Wales to the people of New South Wales. He should explain the big dividends that the New South Wales Government is getting.
He should explain that those dividends are higher than private sector power assets are paying, and he should explain why there is that big difference.
Why all of that money is going into the New South Wales government budget rather than staying in the budgets of families around New South Wales.
And he should say that he's prepared to work with me through the Council of Australian Governments to make a difference to the way power prices are rising in New South Wales.
HOST: It's very interesting to note that the Opposition has said that it might consider more regulation of the energy sector. Would you be willing to work with Tony Abbott to bring prices down?
PM: All I ever hear from the Opposition is, say no to this, that, the other thing. All they do is say no to stuff so I've not heard any positive proposals from them that makes any sense and I'm not expecting to, John.
I won't wait for them to change the habit of a lifetime. I'll just be getting on with the job.
HOST: You make me laugh sometimes, Prime Minister. The habit of a lifetime! But if the habit of a lifetime did happen to be changed would you work with Tony Abbott to bring prices down?
PM: Look John, let's not deal with figments of people's imagination. I mean there's no reason to assume Tony Abbott's going to do anything other than say no. That's what he always does.
HOST: Will you abandon the Malaysian solution since it's pretty clear neither the Coalition about whom we are speaking or the Greens are going to support it?
PM: I asked Angus Houston and some very eminent Australians to work together and provide the nation with a way forward.
I know Australians want to see action here, they're sick of the politicking, they want to see change, they want to see a solution and I want to see that too. I asked Angus Houston, a very eminent Australian-
HOST: Terrific man.
PM: A terrific man, former Chief of the Defence Force, to provide us with a report and a way forward and we'll be getting that in the coming days.
HOST: Okay, the whole point of the carbon tax really is to raise electricity prices, isn't it?
PM: The point of putting a price on carbon pollution is to reduce carbon pollution and that's exactly what pricing carbon will do.
We as a nation will generate less carbon pollution. The equivalent of 160 million tonnes of less carbon pollution will be in our atmosphere in 2020. That's like 45 million cars coming off the road.
It's a big difference that we will achieve through the carbon pricing plan that we've put in place.
HOST: If the carbon tax however, did not raise electricity prices it would be doing its job would it?
PM: We've always been clear John, the purpose of putting a price on carbon is to send a price signal to the big polluters that they need to reduce the amount of carbon pollution that they're generating and they will.
We've always been very clear too that that would flow through to some prices that people pay - households pay, you pay, I pay - and that there would be a 10 per cent impact on electricity prices.
That's why it's come with tax cuts and family payment increases and pension increases.
What's worrying me, clearly and what I was speaking about yesterday and you and I have been talking about today is the huge power prices bills people have seen without one cent of assistance.
HOST: Electricity prices when you look at it, and I'm looking at it now, have increased by something like 60 per cent under you and Kevin Rudd. Pretty dramatic increase.
PM: Well let's be clear on what's driving the increase and where they come from. The figure is 70 per cent in New South Wales - 70 per cent in four years. During that four years the dividends to the New South Wales state government have gone up by 60 per cent.
We are continuing to see big investments, indeed I believe over-investments in polls and wires because there is a policy problem at the heart of this, John.
The more that gets invested in the polls and wires the more the state government earns. So the incentive is to just keep investing, indeed over-investing, to earn more money.
And who's paying all of that price? Well it's the families of New South Wales.
HOST: Okay, just quickly back to the Malaysian solution that is talked about ad nauseum. What is the solution to the Malaysian solution?
PM: I don't quite understand you question, John I'm sorry.
HOST: If the Greens and the Coalition are not supporting it, where do you go from there? What can you do about it?
PM: Well I am asking all Members of Parliament, irrespective of their political party, to do something which I think is pretty easy to do, which is to respect the views of an eminent Australian, Angus Houston, when he gives them.
We should respect those views when Angus Houston and his team gives their report. I think every parliamentarian should show the utmost respect for what I am sure will be a very high quality piece of work because it's been done by such high quality people.
HOST: Yes, I'm getting the impression that you feel that Angus Houston, deliberately or not deliberately, will come out on your side in this discussion.
PM: Angus Houston will come out with what he thinks is best and it's not a matter for me to have a view about that. Angus Houston and his panel have proceeded completely independently of government and that's appropriate.
HOST: Yes, it is appropriate and I think everybody would agree with both you and I that you couldn't get a better fellow than Angus Houston. I think he's a terrific man, terrific Australian and it'll be interesting to see how they work it all out.
PM: It will, John and I want to be very clear. I will be briefed on the Houston report when Angus Houston chooses to do it and having briefed me he will brief the Opposition and other Parliamentarians.
This isn't about a report that goes to Government and we get to sit on it or whatever.
I deliberately set up a panel of eminent Australians to act independently and to give their views fearlessly and frankly to every parliamentarian.HOST: As we constantly say, and you agree, it is a democracy in which we live so if other parties don't agree they shouldn't be forced to agree should they?
PM: The issue here is, if you agree, as we are both agreeing now, that Angus Houston is an eminent Australian, that having been the former head of the Defence Force he is bringing special expertise to bear, that the people working alongside him have expertise in refugee issues and in foreign policy issues then John, doesn't the question really become why wouldn't you listen with a great degree of regard and seriousness to what they have to say?
HOST: Well I think it would be eminently sensible to do so.
Just on another subject. There's been significant community angry over alleged cover-ups by the Catholic Church of Paedophile priests. Do you support the idea of a Royal Commission into this scandal and it's an outrageous scandal?
PM: I think that there are a variety of those ways people are going to get the facts here and get hopefully some sense of redress here.
A number of individuals of course have their own court cases, there are some inquiries for example in Victoria there is a state parliamentary inquiry is my understanding.
So John, yes, when we as human beings whatever position we hold in Australia today as human beings when you hear about some of the things that happened and happened to children it breaks your heart.
And it's important that those individuals get support and get some sense of recognition of the wrong done to them.
The Catholic Church I believe recognises that and the need for that and people are working through their own individual proceedings in some cases.
HOST: Okay, so if a Royal Commission you believe is necessary you would certainly support it?
PM: Look I don't have an intention of having a Royal Commission, John. But I do believe that every individual who has something to say about what's happened to them, every individual who's suffered needs to be treated respectfully and needs to have their suffering acknowledged.
HOST: Okay, on another subject how would you rate Australia's Olympic efforts so far?
PM: Well it's been a great sense of delight overnight. The women have done us proud, they certainly have and that's been fantastic to share in by watch some pretty remarkable TV and my sense is we should just be behind our athletes with all of our force and enthusiasm as they keep participating in these Games.
HOST: I think we're doing tremendously well and I think we are showing great style to the rest of the world and I think that that's very important when you consider the size of the country.
PM: Our athletes are people who've laboured so hard, often sacrificed so much in their own personal lives to get to the Games, to be competing amongst the world's best so let's just be cheering them on.
HOST: And finally, I like that colour blue you're wearing today.
PM: Oh thank you John!
HOST: It's a lovely blue, I'd like to have a car that colour.
PM: Well I can't promise to buy you one for your birthday but I'll forever think of it as, you know, John Laws' birthday blue.
HOST: Good on you Prime Minister. Thank you very much for your time. It's always a pleasure to talk to you. We mightn't always agree politically but it's always a delight to be able to talk to you.
PM: Thanks John.