SUBJECTS: French President press conference, Climate Change, Liddell, Banking Royal Commission
LAURA JAYES, HOST: Gentleman thank you very much for your time this afternoon. Craig Kelly, I’ll start with you. We heard from the French President the power of cooperation on climate change. Does he sway you in any way about this argument?
CRAIG KELLY, LIBERAL MP: It’s interesting I was watching the press conference there and there was Fort Dennison in the background. Seems to be about the same level of the tides as it was about in photographs about 150 years ago. But look, France we have to remember, they generate about 75% of their power from nuclear sources. They also have very significant hydro resources. They are things that we don’t have in Australia, so it’s all very well for France to say we don’t need coal when you’ve got, you know, all that nuclear capacity in your nation. And also when you can import power from the countries around you. Something that we can’t do here in Australia.
HOST: Peter Khalil, do you use Fort Dennison and the level of the tide as your science on climate change?
PETER KHALIL, FEDERAL LABOR MEMBER FOR WILLS: Laura, you noted it was actually the power of conviction that President Macron spoke about with respect to Malcolm Turnbull’s actions on climate change and look, I just make the general point first that having French engagement in the pacific is critically important for us. Through their French territories, obviously they’re our neighbours – New Caledonia, French Polynesia and Wallis and Futuna Islands – so having the French engaged in the pacific is good.
HOST: [interjecting] But Peter Khalil, I have to say, both not wanting to strengthen their language in regards to China. It’s very sensitive at the moment.
KHALIL: Yeah, but having a liberal democracy, a secular liberal democracy, like France, more engaged in the pacific and indo-pacific affairs can only be good for our mutual relationship. But also, in the engagement with China and the rise of China in that respect, with respect to the rule of law and the rules based order. So I welcome that. On the point about climate change, President Macron was very clear. The impact of climate change on all these pacific islands could mean… well, it’s devastating. It could mean that they actually disappear under the water and he called on Prime Minister Turnbull to show the power of conviction and that is what true leadership is about. Whether you were Howard going up against your base on the gun lobby and gun control, whether you were Hawke on Tiananmen square or Asian migration and, you know, against the white Australia policy being returned. Or whether you were Keating on Mabo, those leaders all showed conviction and that’s what’s been lacking in our leadership and particularly on climate change.
HOST: What do you think?
KELLY: So I have to jump in there. The latest science shows the islands in the pacific are actually increasing in size, not decreasing in size.
KHALIL: That’s not true, Craig. What science are you quoting?
KELLY: I’ll go and show you the report…
KHALIL: [interjecting] please do!
KELLY: it’s a recent study by the Auckland University, a Professor Kench, who looked at photographs going back from the 30’s and 40’s against photographs today. And those photographs have shown, Peter, that the majority of the islands in the pacific are increasing in size.
KHALIL: [interjecting] There is overwhelming scientific evidence…
KELLY: I’m quoting you the scientific evidence from the Auckland University
KHALIL: You’re quoting one study by one professor and there is overwhelming scientific evidence…
KELLY: [interjecting] I’m telling you, Peter, that there is no scientific evidence whatsoever that any of the islands in the pacific are shrinking.
KHALIL: That’s not true.
KELLY: In-fact, if you look at them Peter, the scientific evidence says they are increasing in size.
HOST: I think the point is, and let’s not go back a couple of years when we were still debating the science of climate change, but let’s bring it back to the point of the President. He’s urged Malcolm Turnbull, Craig Kelly, to have conviction when it comes to climate change. Malcolm Turnbull is closer to closer to his view of the world than he is yours.
KELLY: Look, I wouldn’t say that.
KELLY: Simply that France will argue from the point for the benefit of the French nation. Remember that France gets 75% of their electricity…
KHALIL: You’ve said that.
KELLY: All their baseload electricity, from nuclear power stations. Now that is what gives France a competitive advantage, so it’s all very well for France to say get rid of your coal fired power stations, because that has no effect in France. France don’t rely on coal. Years ago they decided they’d go down the nuclear track. So they want to have policies that harm Australia but yet have no effect on France.
KHALIL: You raised a very good point, Laura, about Malcolm Turnbull’s belief around climate change. We don’t know now, I don’t know what he believes anymore, because, is he actually trying to appease Craig Kelly and Tony Abbott and the far right of his party? Does he still believe what he believed five or six years ago on climate change and the need to take action on it? No one knows. That’s why the point about having the power of your conviction is so important. I know what Craig believes. We’ve got no doubts about what Craig Kelly believes. That’s what he believes. We don’t have to agree…
KELLY: [interjecting] Let me tell you what I believe. I believe that we have to have efficient, low cost electricity in this nation but you guys in Labor don’t care about that….
KHALIL: But I don’t know what Malcolm Turnbull believes anymore.
HOST: [interjecting] Okay…
KELLY: We know that you don’t care about low cost electricity at all
KHALIL: That’s not true either.
HOST: [interjecting] Do you still believe, Craig Kelly, that the National Energy Guarantee provides that apparatus?
KELLY: I believe it will, but the concern about the National Energy Guarantee is Peter’s mob over there, they’ve said they want to change all the settings, so any certainty….
HOST: [interjecting] Let’s talk about the settings under your Government, because you are in Government at the moment. Do you believe it still provides what you say is your biggest priority, the most cost effective energy in this country
KELLY: That is what the National Energy Guarantee is designed to do. We’re still waiting to see the final parameters and the settings. But the thing is, the National Energy Guarantee is meant to give certainty to the market so we can get the investment, but that certainty gets destroyed and ruined by Peter’s side of politics, who say, look, we don’t care what you do with the National Energy Guarantee, if we get into Government we’re going to change all the settings anyway.
HOST: Let me quickly ask you this question and I’ll get Peter to respond. Do you still think the Government should compulsorily acquire AGL if it refuses to sell? We now see a $1.2 billion offer on the table from Alinta. But AGL seem unmoved. That’s to you Craig, sorry.
KELLY: Oh, sorry. Look, I think competition law is very clear in this respect and I think whoever is advising AGL on the prospect of competition law really should be very careful about what they’re saying and making sure they have indemnities in place. It is very clear AGL have a substantial amount of market power. Our laws say that they then cannot do anything that results in a substantial loss to competition. Today we’ve had in the papers the best experts in this field saying if they closed down Liddell and they do not sell it to a competitor or offer it on the market, that will lead to an increase in wholesale prices, higher than what they would otherwise be. That is a….
HOST: [interjecting] You’re shaking your head, Peter. Why?
KHALIL: Laura, every time Craig just throws out these statements. It’s like fake news in reverse. Look, the Australian Electricity Market Commission’s own reliability panel recently did some modelling and put out a report…
KELLY: [interjecting] I’m talking price
KHALIL: Don’t interrupt me.
KELLY: [interjecting] You’re talking nonsense
KHALIL: Don’t interrupt me. Put out a report that modelling shows, this is the AEMC, their modelling shows that even with the closure of Liddell, the expected retirement of Liddell in 2022, there is no impact on reliability, and sorry I’m going to be precise about it, they said there was 0.000001% chance of reliability being impacted…
KELLY: [interjecting] What about price?
KHALIL: Okay, that tells you a bit about the closure of Liddell…
KHALIL: …on the AEMC’s reliability panel’s report and modelling. That’s science, Craig. You can’t argue against that and you’re running a scare campaign, you put out these things and say, oh, well, reliability, dispatchable power’s going to be impacted and reliability’s going to be, it’s all rubbish mate.
KHALIL: And you’re, earlier on, talking about the science of the pacific islands.
KELLY: Go and get a copy…
KHALIL: You can’t just say something and believe it. And I want to retract part of my earlier answer, Laura, where I said I knew what Craig Kelly stood for. I actually don’t, ideologically. Because him and his mates like Tony Abbott are like Karl Marx on steroids. They want to spend $4 billion renationalising a coal fired power plant. I mean, what are they? Socialists? I’m really confused right now.
HOST: Let me ask you about this next issue. APRA and ASIC, we’ve seen these regulators both heavily criticised over recent weeks. We’ve seen the banks and the evidence before the royal commission. Peter Khalil, first to you, what can be done about the corporate regulators. Are they strong enough? And I’m not just talking about funding, here. Are they too close to the people they’re trying to keep in line?
KHALIL: Yeah, that’s a good question Laura. And look, this is why we wanted to have this Royal Banking Commission, to look into these issues. Obviously the Banking Commission’s terms of reference are looking at the banks and the financial services and not so much directly at the regulators. But it’s bringing out and exposing some of these issues for debate and for us to look at and consider as lawmakers. And there’s certainly a need to do that with respect to the role of regulators, the structural role, but also the culture within the regulators as well, whether they’re too close, as you say. But, you know, again, Craig Kelly’s mob didn’t even want to have this. They were running a protection racket for the big banks and rewarding them with $13.2 billion in tax cuts. Way to incentivise bad behaviour, Craig!
HOST: Craig Kelly, do you think it’s still politically palatable to be handing the banks this corporate tas cut?
KELLY: If I could Laura, just before I answer that, I must pick up on this Peter, it’s the AEMO. Australian Energy Market Operator, not the AMC…
KHALIL: No, it’s the Australian Energy Market Commission
KELLY: Their report does not talk about price. We’ve had in the papers yesterday analysts from JPMorgan who look at this in much greater detail than any of us and they have said very clearly, if you take out over 1200 megawatts of base load power from Liddell, you will end up with higher wholesale prices in the market. That is a fact.
HOST: Do you think it’s the right environment to be giving banks a company tax cut?
KELLY: In the environment and international circumstances that we face, where we have the US that have reduced their corporate tax rate to 21%, where the UK have reduced….
HOST: [interjecting] What do you say?
KHALIL: Answer the question!
KELLY: They are concerned that we have to have an internationally competitive tax rate and at 30% we don’t. We can look at short term issues and say, yeah, let’s bash the banks and not give them a tax cut, but we need to….
KHALIL: [interjecting] No-one’s bashing the banks. You just don’t give them $13 billion.
KELLY: You need to look at the economy on the whole. And we need to ensure… Peter’s mob aren’t concerned with having competitive electricity prices. We need to also have competitive electricity, we also need to have a competitive rate of corporate tax and at 30%, when the US is at 21%, when the UK is going less than 20%, we’ve got Hong Kong and Singapore below 24%, we no longer have that.
HOST: Well, Craig Kelly, Peter Khalil, we’re going to call that a ceasefire for now, but we’ll see you next week. As always, thanks so much.
KHALIL: Thanks Laura.