HOST: Prime Minister, compliments of the season to you.
PM: To you too, Leon.
HOST: Now we've just had Laurel Fox-Allen from Electricity Week point out that if we all get smart meters, then not everyone is going to get a power discount because it favours those people who are big users. What do you say to that?
PM: Appropriate arrangements will always be made in the system for small users, for people who are in our most disadvantaged categories in our society. We want to make sure that people are getting a better deal.
So this isn't about imposing things on people, making them pay for things, it's not about that. It's about putting people in a position where they can have more information and use that information should they choose to do so.
Let's just cut that one right off at the knees now. No one should be afraid that they are going to be forced with a cost that they don't want and no one should be afraid that they will be forced to do something they don't want to do.
HOST: Yeah, because Pat Conlon as you might know, our former Energy Minister, made the decision some time back that he didn't want a mandate for smart meters. So in this proposal that's not going to happen, you can have one if you want one?
PM: We'll be making appropriate arrangements for everyone, Leon. So let's focus on what's actually happening.
HOST: Absolutely.
PM: Not fear campaigns about what might happen. The problem at the moment and people in South Australia know it only too well, that their electricity bills have been skyrocketing. People have seen 40, 50, 60 per cent increases.
HOST: Yes.
PM: That is not about carbon pricing. That is about problems in our current electricity system; over investment in poles and wires. Consumers not getting enough of a say about how the market works.
Big users - and by that I mean very, very big businesses - having no incentives to just moderate their power use during times of peak demand.
All of that means that we're in a situation where $11 billion has been spent on infrastructure that is only used four days of the year, but the cost of that $11 billion is paid by everybody every day.
Now we can do better than that. We can be smarter than that. We can design a market that works more fairly than that, and that's what I'm determined to do.
HOST: What would you like of the South Australian Government at the COAG meeting this Thursday, Prime Minister?
PM: What I would like of the South Australian Government - and of governments around the country - is that they endorse the plan that I will be putting forward. Energy ministers have been working on it intensively and have recommended something by agreement.
But I think at COAG when leaders meet we can push the envelope a bit further than what energy ministers have agreed; get a bit more done. That's what I'd like to see come out of COAG.
HOST: By how much do you think - and I won't keep you to the exact dollar - but in general terms, by how much do you think with these changes that you're talking about, do you reckon you can bring down an average power bill?
PM: Well the Productivity Commission has said that it would make a $250 a year difference for households, so that's the Productivity Commission's figure.
We face the spectre that power prices just keep going up and up and up. I want to make a difference to way in which prices are worked out so that we don't see that continued rapid escalation.
HOST: Now this consumer panel that you'd like to have a say, as I understand it, they're only comment will actually be on the networking charges but not the other parts that make up the bill. Why not have it across the entire bill? And what kind of regulatory or disciplinary power would that consumer panel have?
PM: Well the consumer panel would be asked to fundamentally engage with the thing that drives the biggest cost escalation in your bill. That's why we want them focused on the network charges and the way in which all of that is rolling out, because that's what's driving the biggest cost escalation.
Their voice would be heard as the rules for the market are designed. And once the rules are designed and everybody's got to abide by them; they've got legal force.
HOST: So you'll be asking our Government to give power to COAG to have national regulations and oversight of the electricity market?
PM: This will be still shared work, States will play a role, the Federal Government will play a role. But together we would design a new system for the rules for our electricity; the way electricity works around the country. That will make a difference for prices
HOST: We went down the path of trying to get rid of coal-fired power over time, and then we decided that we for whatever reason, obviously budgetary, we couldn't compensate the coal powered industry for its contribution to electricity generation. So in a sense we're now subsidising them.
PM: I wouldn't quite put it like that. Separately to all of this we through carbon pricing have obviously created incentives which will drive usage of cleaner energy sources. Cleaner energy sources like gas, and like renewables - solar, tidal, wind - so that incentive is in the system.
And yes, carbon pricing did cause an increase in electricity prices, we were always upfront that is was going to cause a 10 per cent increase. And so we assisted people with tax cuts and pension increases and family payment increases.
What's really put the pressure on though is the 40, 50, 60, 70 per cent increases that people have had to try and deal with, with not a dollar to assist them along the way.
HOST: What do you think of companies who deliberately withdraw supply to force the price up? It's called gaming.
PM: Well obviously anything that puts the price up artificially is bad for families, bad for Australians.
HOST: What would you like the national regulator to do about that?
PM: Well I want to see a market that's got fair rules, so if there's untoward gaming of the system then we'd obviously want that to be addressed.
HOST: Prime Minister, thanks for joining us today.