Interview with Rafael Epstein, ABC Melbourne

1.05pm | June 16, 2022

Interviewer: Rafael Epstein
Subject: Australia’s 2030 Climate Targets, energy

RAFAEL EPSTEIN, HOST: Jenny McAllister is one of the Labor Senators in New South Wales and she is the Assistant Minister for Climate Change and Energy. Thanks for joining us.


EPSTEIN: Why did you say that? And have you given what young people voted for? Because a lot of them might have voted for Greens candidates and Teal candidates who want you to do a lot more.

MCALLISTER: Raf, I've spent much of my professional and political life thinking about climate and the environment. It's been an absolute focus for me, and I guess as a consequence, it means that I have often had opportunities, while I've been a parliamentarian, to talk with young Australians about what matters to them. Overwhelmingly, young people say that climate is one of their number one priorities, if not the number one priority. They also have indicated real despair in recent years. Just despair that their voices were not being heard, were not being listened to. As someone who cares about democracy– I think we all should value it a great deal– that's a tragedy. So, I did want to make the point that yes, today is an important economic moment. Yes, it's an immensely strategic moment for Australia and our relationships within the international community, but it is an important democratic moment because young people and Australians more generally, asked us to pay attention to this issue. And today is a very, very important step in taking this issue seriously as a government.

EPSTEIN: I want to ask if you think it is enough. Let me give everyone who's listening a bit of context to that question, though. So, people like Climate Analytics say that your target, that 43% reduction, that is consistent with global warming of two degrees, that is a breach of what Australia promised. Australia signed up under a Coalition Government in 2015 to keeping warming well below two degrees. So, there's a lot of groups who don't think what you are doing is enough. And they say, the science says you're not doing enough. What do you say?

MCALLISTER: I think the tragedy of the last nine years is that we have made almost no progress on reducing our emissions and building the sustainable and renewable industries of the future. So, we start here in 2022 with much less time in that window between now and 2030. So, when we set about assembling our policy, we looked at all the things we could sensibly do, the sectors where we could reduce emissions, the places where we could introduce more renewables, and we made a calculation about what we could do as an economy that would be meaningful and real. A 43% reduction by 2030 is a very substantial gain on what the Coalition were promising. It's a very substantial gain on what Mr Morrison argued for at the election. I think the real test will be in our actions in the coming years to implement the policies that we’ll deliver on it–

EPSTEIN: It does sound like you would like it to be higher–

MCALLISTER: I am very comfortable with where we are, and I look forward to really implementing the policies that will set us on a path to a more sustainable economy.

EPSTEIN: Okay, let me ask you this then. Let's get to the electricity issues we face now. As someone, as one of the ministers who's got to fix them, do you think over the next few days either in Victoria, New South Wales, South Australia, do you think there will be some scheduled power outages and load shedding?

MCALLISTER: Look, our real priority has been keeping enough power in the system to meet the needs of consumers, particularly households. So far it's been possible, despite real pressures on the system, to avoid blackouts and avoid load shedding. Everybody is working towards that outcome and so far, fingers crossed, it's gone well. The really important thing here has been to work with all the actors in this system and not point fingers. This is a system that is jointly administered by states and territories with the support of the market regulators. One of the things Minister Bowen has done particularly well is to really respect that shared responsibility, to collaborate with states and territories, to work with the regulators and actually to resume normal operations where all of those institutions need to be talking together and working together.

EPSTEIN: When are we going to get back to normal, though? I mean, you can't suspend the market forever. How long is it going to go on for?

MCALLISTER: Well, the AEMO, who's the market operator, has said that they will review it every day and Minister Bowen has said that it will be in place for as long as it needs to be to secure the interest of consumers–

EPSTEIN: You can’t do this for months can you?

MCALLISTER: And not one more day longer. There's an unusual set of factors that have driven the pressures on the market in the last couple of days and we're in the hands of the experts. AEMO has deep expertise, and we'll rely on them to provide us advice and to make these really important decisions about how the market should operate.

EPSTEIN: Are the power generators, again just a little bit of context, when the prices were capped, which we've never done before, some of the generators just pulled out. Nothing stopping them doing that. But when they're forced to go back in, they get compensation. Now you've totally suspended the market. They still get compensation, so they're still getting extra money no matter what goes on. Do you think some of the generators are behaving inappropriately?

MCALLISTER: Look at this stage, the real focus is on ensuring that we have the necessary supply for consumers. I know that all of the Energy Ministers are simultaneously concerned that consumers' interests regarding price are also protected, and they've asked the ACCC and the AER to watch the behaviour of market participants closely. Again, I think we have to rely on the fact that we have very good institutions in the AER and the ACCC, and I think we'll rely on them to tell us if there is any poor behaviour in the market. I think the real focus, though, in the last week has been just making sure–

EPSTEIN: That we keep the lights on.

MCALLISTER: Yeah, that we keep the lights on, and everyone gets what they need.

EPSTEIN: Can they tell - and this is something I really don't understand - you tell me, you're the Assistant Minister for Energy - can they tell if the generators are acting unethically? It seems to me, that one of the big problems is the way the market works. They can order them around, but they can't really tell if the generator is gaming them or not. Do you think they can tell the people who you're trusting, the public service? Can they tell if the generators are acting improperly?

MCALLISTER: Look, these entities have strong powers to regulate these players and to look at their behaviour. But I think your question points to something just a little bit broader. We have had almost a decade where the Coalition was completely unable to land an energy policy. In that period, technology changed, market participation changed and there was opportunity after opportunity to really update the way that the market worked to reflect these new changes and also to update the infrastructure that supports the market. None of that happened. We had a decade of inaction and I think, unfortunately, as we've seen in the last few days, you can't ignore a big system like this for a decade and expect that there won't be any consequences. Under the Morrison Government and frankly, the Prime Ministers before him also, we've just seen so little policy energy in this area and sadly we're reaping a bit of harvest, but we're determined to get on and fix it. I think the level of collaboration in recent days between the state and territory ministers and our government has been immensely encouraging.

EPSTEIN: So, if I can actually focus on that, and this might be the last thing to focus on. I know the Prime Minister was asked a few times this morning on the radio, the rules that govern the electricity market. I don't know how many people understand them, but they're really important for our future. Are you going to change the rules the way the electricity market runs, and don't you have to change them in the medium-term?

MCALLISTER: I think it's inevitable that the way the market works will change, and it will change as a consequence of new technologies, new players and new demands from consumers. We're in a period of immense technological change at all levels–

EPSTEIN: That's not quite market, though. Are you going to change the rules?

MCALLISTER: Well, the market rules, I should say, are constantly being revised and updated. That is the AEMC's job. They run the policy settings for the market. The problem has been a real unwillingness to progress their recommendations, to progress those changes through the Energy Ministers' meetings. That will be the difference with our government. There is an absolute determination to modernise our electricity system and I think you've seen enormous energy brought to that task by the Prime Minister and Minister Bowen in recent days.

EPSTEIN: Thank you for your time. I really appreciate it.

MCALLISTER: It's a pleasure. Thanks, Raf.

EPSTEIN: Jenny McAllister. She's the Assistant Minister for Climate Change and Energy.