Hume and McAllister, Sky News
17 March 2023
TOM CONNELL: Welcome back to our weekly edition of Hume and McAllister. Each week the Shadow Finance Minister Jane Hume and Assistant Climate Change and Energy Minister Jenny McAllister has to face off and fire up on the big news and political developments. Jane, Jenny, welcome as ever, we begin by letting you both warm up with a topic of your choice. Start with you this week, Jenny, what’s got you fired up?
JENNY MCALLISTER: Well, Tom, there is not a policy problem that the Coalition has ever seen that they don't think can't be fixed by taking the axe to superannuation. And a report yesterday came out, which showed the devastating impact that that approach has had for millions of Australians. During the pandemic, the Coalition allowed people to empty their super accounts, more than 2 million Australians access to those provisions. 75% of them took out the full $20,000. That was possible, a quarter of them emptied their balances. And the consequence of this at retirement could be as much as $120,000 less in retirement income in today's dollars. It's a lot of money. And it's exactly why the Labor government is interested in having a conversation about the purpose of superannuation, we built super. We built it so that people could have a secure and dignified retirement and attacks like these from irresponsible governments who always wanted to destroy superannuation should never be allowed to happen again.
TOM CONNELL: All right, right on time when we're talking about budgets there, Jane. So there's the challenge. What are you talking about this week?
JANE HUME: Well, I feel like I should change my spray now and go in and defend the the COVID measure on superannuation, but I won't do that, because I'm going to talk about the default market offers in the energy market instead, which we saw come out this weekend in my home state of Victoria, we're now seeing around 400,000 households and 55,000 businesses that are going to see their energy prices increased by more than 30%. That's going to have a devastating impact, particularly during the winter months. I got an email this week from a fellow called Ray Ray's big fan of the show. Hi, Ray, friend of the show. And I want to read you a couple of lines of what Ray sent me this week. He said that the “cost of living is a major issue and talking to friends it's having a serious impact on people's budgets, power bills are only going to keep rising. Where is the $275 reduction? Without a plan, we are doomed”. So Jenny, perhaps you can tell Ray, where is his $275 reduction? Where is anybody's reduction in power bills, and how many Australians are going to have to switch the lights off or switch the heater off this winter, just so that they can afford those energy bills. This simply isn't good enough. It's just one story out of thousands that we're going to hear over the next few months. And all from a government that promised 97 times to reduce power bills by $275. Please explain.
TOM CONNELL: Well Jenny will get her right of reply. Later on. It is a topic we'll get to so stay tuned Ray. Let's move on to our first topic. Though the much anticipated details of the submarines to be acquired under the AUKUS defence pack revealed this week Anthony Albanese joined US and UK counterparts in San Diego to reveal Australia would spend up to $368 billion over the next three decades. To buy eight nuclear powered submarines. The Opposition leader praised Labor for carrying through with a deal inked by the coalition government, but it has raised the ire of China and of course, some criticisms on home soil. Let's see how it all unfolded.
TOM CONNELL: Lots and lots of news conferences from Labor ministers. I didn't hear anyone Jenny say well, thanks also to the government and the Prime Minister that signed us up to this Scott Morrison, does he deserve some praise?
JENNY MCALLISTER: Well, at the time of the announcement made by Mr. Morrison, we gave it our support, and we've been determined to implement it in a way that reflects Australia's national interests. As you heard Mr. Marles say, this is an enormously important investment in our future sovereignty and our strategic capability. It is one part of a broader suite of reforms that we’re contemplating to ready Australia for the decades ahead. It is, it will have very significant impacts on our industrial capability on our workforce. It is a very significant project indeed. And we are determined to take it forward.
TOM CONNELL: So what about full confidence? The Coalition has an in the deal itself, is that where we're at right now, Jane, Labor's obviously inherited this deal. And right now the Opposition saying, ‘Yep, we trust you’, it's still a fully bipartisan approach.
JANE HUME: In fact, bipartisanship was part of the deal to begin with Tom, there is no way a Labor government could ever have entered into an orchestra arrangement just because of the implications of the nuclear energy that propels those submarines. But it's something that we could do when we were in government, because we also, you know, demonstrated a capacity and a determination to know that our shipbuilding program here in Australia, and also that we have committed to increasing our defense spending to beyond 2% of GDP after it got diminished down to 1.56%. Under the previous Labor Government, now, we are thrilled that Labor have not just adopted, but also embraced AUKUS because not just those industrial implications that Jenny mentioned, which of course, are important, because of the national strategic imperative that this provides Australia and provides our region, it is the best deterrent and the best indicator of a peaceful region for many years to come. I think that this is a fantastic initiative. And I think that the Labor government now does too.
TOM CONNELL: So on the security aspect of this agenda, we're not secure unless we can pay for it. Now that we know the cost of this, which is eyewatering, does it need to come with actual savings? Not ‘we won't spend too much money’, but savings spending cuts from existing programs, whatever they might be departments?
JENNY MCALLISTER: Well, Tom, I think we've made it very clear that this is one of a number of pressures bearing on the budget. And unlike the previous government, we’re pretty determined to have an honest conversation with the Australian people about how those pressures work. The impact of the announcement made in recent days, over the forward estimates is budget neutral. And there are some savings that will be derived from the cancellation, of course of the attack class, and some other savings that will become clear as we approach the budget. But this pressure that arises from our defence requirements is a factor that we're going to have to make room for in the budget. And that won't be a task just for this budget, it'll be a task for budgets to come as well.
TOM CONNELL: That the price tag on this the government so we met Jane is just point 1.5% of GDP as an average over the life of the project. It's going to be relatively cheap initially and then get really expensive. Is that a bit of a misleading price tag? Do we need from Labor estimates and of course, they'll change. It's a big, unwieldy project, but estimates over what it would peak in terms of percentage of GDP?
JANE HUME: Well, that's going to be hard to say, because with defence projects, as you would understand they are a bit of a moving feast for the forward estimates what we've seen as a $9 billion spin. And as Jenny said, about $6 billion of that is going to be offset against the attack class submarines. But there is about 3 billion that has gone, gone missing, if you like, we hear that it's going to be from other cuts to defence, I suppose our concern will be what will that look like? What programs are being cut? Is it coming from the army? Is it coming from the Air Force? Is it coming from the Navy? What will be the flow on effects of those cuts to Australian private sector industries as well? So there is still more questions to be asked. Yes, the price of AUKUS is enormous. We know that. But it is a price that I think that our country is willing to pay to make sure that there is peace and security in our region.
TOM CONNELL: Right. So just to clarify on that you're satisfied, though, by the broad price tag of an average point one 5% of GDP over the life of the project.
JANE HUME: I think more will become clearer on the price tag as the program progresses. But it is important that we make sure that we are vigilant and making sure that there aren't cost blowouts unnecessarily cost blowouts, inefficiencies and waste are simply unacceptable in a program of this importance, and of this size. So there will be certainly be oversight. This is not a free for all on the budget. I can assure you of that. Quite the opposite. This requires even further scrutiny and making sure that we are maintaining a budget discipline in other areas as well. Not just defence.
TOM CONNELL: Yeah, other areas but defense is the reality here, Jenny, when you look at the defence budget and some of the extraordinary headlines and ways So over the years, if it's managed better, you can make genuine savings in there. We're talking about billions.
JENNY MCALLISTER: Tom, the particular arrangements will be made clear at the budget as I as I said to you, but the defence strategic review is an important part of this thinking about what capabilities require thinking about our strategic posture and ensuring that our investment priorities are aligned with those priorities. We've said about approach we've approached this in an orderly way. There are further announcements to come as we approach the budget. All will be clear on budget night.
TOM CONNELL: All right, we'll find out soon enough there, but it's not that far away. We're gonna take a quick break. When we come back. We'll talk through power price hikes, what households are facing and what could be done to bring them down will they be down next year stay with us.
TOM CONNELL: Welcome back well, Australian households are expecting more energy price shocks from mid year the regulator's draft decision shows increases the power bills of about 20% up to 31% Victoria as well from July while the energy market operator yesterday warned a looming shortage of gas on the East Coast could see prices surge over winter.
TOM CONNELL: So the message at the moment from the government Jenny is prices are going up, but they would have gone up more without what we did, which isn't probably going to give people a lot of comfort, can you say this, that you're confident the next major movement for you know, we're talking a year's time will actually be down, not just not as high but down.
TOM CONNELL: Well Tom, two things are going on. We inherited a energy market that was entirely disorderly as a consequence of a decade in which the Coalition failed to land, a single energy policy, despite floating about 22 of them. And we've set about trying to tidy that up to restore order and predictability into those markets so that we can actually establish a framework for investment can take place with confidence. The second thing, of course, which the Coalition likes to ignore, is that we are in the middle of a global energy crisis that is unprecedented, at least in recent decades. And the consequence of that is that there are very, very high prices indeed, for the fuels, which power Australia's energy system, if we had more renewables in the system, we'd be less exposed to these due to these price increases, which are predominantly driven by international factors. But that's not where we are. And so our role is to take the sting out of the prices that are coming towards us, at the same time, as making the necessary reforms to position the energy market for the future. That's what we've been doing. We can't control all of the volatility in the system, but we can put the right settings in place.
TOM CONNELL: But they've gone up so much since you've been in power. You spoke about what you inherited by the next AEMO decision. I'm saying a whole nother year you will have been in power for about two years it the confident by then you'll actually be saying the prices are going down, not the going up, but not as much as they would have.
JENNY MCALLISTER: In my last answer, I pointed to the very substantial international volatility that exists in international markets. And they are principally a consequence of the illegal invasion of Ukraine by Russia. And we can't wish that away. That's a really dreadful situation, not just for our country, but actually for countries all over the world who are grappling with the same energy pressures, what we can control, the investment settings and the market settings for the Australian context. And that's what we've been busily doing. We've been working with states and territories, we've been taking soundings from industry participants, we've been working with the market bodies that provide us advice, to set the policies in place that will put maximum downward pressure on prices, and ensure that adequate energy supplies are available for Australian businesses and consumers at an affordable price.
TOM CONNELL: We'll come to you in just one moment, Jane, I promise you standby. Just thank you very briefly to Adelaide, Linda Burney and Senator Patrick Dodson, speaking with members of the Indigenous Voice to Parliament, the referendum working group is this group. Let’s have a listen in.
(cut to press conference)
TOM CONNELL: All right. So we're just alerting you to that. We'll bring you coverage of that, because that's something the Labor government is trying to make some progress on. So we'll bring you the highlights of that news conference next hour. Jane was almost bursting out of the screen on my monitor in the studio when I went there, Jane, on the gas cap, or what authorities are saying this prices would have been higher without it. Is it working deep grudgingly say that?
JANE HUME: No, it's not working. It's actually frightened off potential investors. We know that the only way to bring down the prices in the long term is by increasing supply, but you put in a price cap and those policy settings are actually frightening away those investors. This is a problem of this government's making. And now they're trying to find solutions and point to anybody else to say it's not their fault. It's somebody else's fault. But in fact, they came to government promising a $275 reduction in energy bills. They've failed dismally in that, in that quest, they won't even say the words $275 and now they're scrambling around trying to marry up their emissions policies with their energy policies and Australians are paying the price. When we're in government, we prioritised three things, reductions in emissions, but not at the cost of reliability and affordability. Well, the reliability and affordability have gone out of the window from this government. And they have some questions to answer. It's not all about emissions study emissions are important. But we were on track to meet our emissions targets. We passed Kyoto, we managed Paris, and we are going to manage net zero by 2050. But not at the cost at the price of Australians, energy security and safety and the ability to turn on a heater or a light in the middle of winter.
TOM CONNELL: But on what is happening to prices, this AEMO stuff is short term, it has brought down the price. Now what you allude to there around supply, could well become a burning issue over the next year or two. But in the short term, what we're hearing from the regulator is the price did come down, you can't actually say that hasn't happened.
JANE HUME: AEMO said that the current policy settings, the interventions in the market, plus inflationary pressures plus the pressures on supply, actually having an effect on supply into the market onto gas supply into the market. That's a real problem.
TOM CONNELL: and that could come to face at times if we get a good shortage in winter, sure.
JANE HUME: Let’s face it Tom, Chris Bowen going out there saying Australians are so lucky that we're here. I don't think anybody's feeling all that lucky when they're opening their electricity bills at the moment. I don't think that you know, somebody that's seeing a 30% increase in their electricity prices is thinking ‘thank heavens, the Labor government are here to help
TOM CONNELL: Right, you can't cherry pick what the regulator is saying. It's also saying prices have come down in the short term in the predicted next. That's true,
JANE HUME: They may have come down, if they've come down the short term time that's fantastic is that they're not actually flowing through to anybody's energy bills, there are going to be hundreds of thousands of households, thousands and thousands of businesses that may will have to shut up shop because of the policy decisions of this government. And they've got a lot of answering to do.
TOM CONNELL: Okay. Jenny, you I asked you two times before, if you're confident that in a year's time, there would be prices coming down and you said, look, a lot of different factors go into this. So so it's hard to be we've already had prices go up considerably. If they're not even sure if you're not sure they're gonna go there next year, how could you be sure that by 2025, there will be a net $275 saving from the for the election.
JENNY MCALLISTER: Tom, here are some things that we know. We need a settled energy policy so that we can bring forward the investment we require. We need new assets, electricity generation assets in the system, and the regulators have repeatedly pointed to that requirement. We know that renewables are the lowest cost form of new generation. And that's why our policy settings prioritize the introduction of firmed renewables into the system. And we are putting in place additional mechanisms to bring forward that firming capacity that will support stable deployment of those renewables into the energy system. These are all the kinds of reforms that are necessary to have long term stable investment in the energy system. And in the short term is what will bring down prices for consumers.
TOM CONNELL: Sure but let me just ask this really directly. 2025, will prices still be down by-
JENNY MCALLISTER: The issue with the way that-
TOM CONNELL: This is Labor's promise, I’m just asking. Are you still standing by that one?
JENNY MCALLISTER: Well, this is 275 number was a point in time model estimation based on external factors. And Jane can't wish away the external world. The war in Ukraine has produced a massive upheaval in global energy markets. It has affected all of our trading partners-
JANE HUME: Jenny, the war in the Ukraine was going on when you made that energy promise.
JENNY MCALLISTER: Jane, are you denying that there is a global energy crisis underway? This is a ridiculous starting point for you-
JANE HUME: Are you denying that there was a war in Ukraine going on when you said the words $275?
JENNY MCALLISTER: You’d do better to acknowledge the world as it is.
JANE HUME: Oh it’s always somebody else's fault.
JENNY MCALLISTER: and craft your policies to respond to it. Jane, I don't think we'll take lectures from a group of people who couldn't land a policy of any kind in the 10 years they were in power.
JANE HUME: Hey, electricity prices weren’t doing what they’re doing now, under us.
TOM CONNELL: Okay. I just want to clarify, Jenny, just one more time on that. Is Labor still sticking by the $275 promise?
JENNY MCALLISTER: We are absolutely confident that the policy settings that we have in place will put downward pressure on bills in a way that would not have otherwise occurred. Had we stuck with a chaotic and dysfunctional approach.
TOM CONNELL: That's not the question though. Is it?
JENNY MCALLISTER: Tom, I've given you my answer. And I've also pointed to a range of variables that we can't control. But we are doing everything we can to work with the variables that we can and most important amongst those is setting in place clear policy settings in both the energy climate policy areas. So that investors may make good decisions to support the interests of Australian consumers and businesses.
JANE HUME: Sounds like $275 has gone the same way as no new tax cuts, no new taxes, what do you reckon?
TOM CONNELL: Very briefly, we've got not much time on the show at all AFL seasons here, and this was suggested by Jane, so she gets to go first. Jane, I know you're a long suffering Saint supporter. Ross, the boss. Is it the second coming? Or is it going to be a long season for your mob?
JANE HUME: Absolutely. I'm a glass half full kind of gal, you know that time and it's going to be St Kilda as year this year, we've got a new coach. We're rejigging the list. It's going to be fantastic. I can't wait for Sunday when we play Fremantle. It's going to be full on from the first bounce.
TOM CONNELL: That's just proof Jane can talk up anything, Jenny? I'm not sure if you've got an AFL side but you’ve at least 30 seconds to think about this, predictions, revealing your side. What do you got for us?
JENNY MCALLISTER: Tom, these are very Victorian areas and I don't know whether Jane is going to the game on Sunday but I was pretty jealous to see that there were sort of 88,000 people at the game yesterday. Like what an incredible feature of Victorian community life, you know, the AFL season is but I'm a Sydney person. I back the Swans. They made it into the finals last year. Hope that that happens again.
TOM CONNELL: All right, Swans up against Gold Coast. We'll put that down as Jenny's hot tip. Thank you, Jane and Jenny. We will talk next week.