Interview with Sally Sara, Radio National Breakfast, ABC

Minister, welcome back to Breakfast. Good to have you in the studio. CHRIS BOWEN: Great to be in here, Sally.

Thank you. SALLY SARA: Before we get to the fuel challenges at home, what's the federal government's understanding of whether the US has reached its objectives in this conflict? CHRIS BOWEN: Well, obviously, we are not central to the conversation between the United States and Israel and Iran.

We are monitoring the situation closely, and of course, Minister Wong in particular has been talking to Secretary of State Rubio. Obviously, it's in everyone's interest that this conflict is resolved as quickly as possible, not least the people in the Middle East, but obviously the entire world economy, and that's what the Prime been calling for and calling on.

I'll leave it to the United States administration to comment on whether their objectives have been realised. SALLY SARA: Has there been regime change? CHRIS BOWEN: Well, clearly the leadership of the regime has been killed, but similar people have taken over.

But again, it's not my position to comment on the United States' objectives and whether they've been fulfilled. That's a matter for the administration. SALLY SARA: Let's return to fuel at home.

Will the cut in fuel excise push up demand and lead to further shortages in some areas? Is that a concern the government's been looking at? CHRIS BOWEN: We certainly considered all that, Sally, in this decision, but I think it's fair to say petrol prices are very high and will remain higher than they were because we've always said the biggest impact on petrol prices will be the international oil price, which is unlikely to plummet any time soon.

But in the face of that, a sensible thing to do would be to provide as much cost-of-living relief as possible; to take that 26 cents a litre in terms of the excise, and obviously some further impacts from the GST cut as well off. Now, that does mean that... To answer your question, I don't see people racing down saying the situation's solved and Albo's fixed it and now we'll buy more petrol because that's not what we think, and I don't think that's what Australians would think.

SALLY SARA: On the issue of panic buying, David Leaney is an expert in supply chain management and lecturer at the Australian National University. This is what he had to say on breakfast earlier this morning: DAVID LEANEY, INTERNATIONAL SUPPLY CHAIN EXPERT: I think it's time for some tough love to overrule the behaviour. We tend to ask what's the government doing, we don't ask what's the public doing.

So I think there's some things like no containers, no jerry cans, certainly no 1,000 litre water tanks on the back of utes, which we've seen. Limits on purchase, prioritisation of diesel to farmers and regional areas, invoking the Liquid Fuel Emergency Act and overruling some of that behaviour to stop people being able to panic buy. SALLY SARA: What do you think of that perspective?

CHRIS BOWEN: So, I mean, there's a few things in there. He said quite a lot. And some of that's already happening.

You know, we are prioritising diesel to rural areas for farmers. That is happening. I can tell you over the weekend even there were huge amounts of diesel delivered to regional New South Wales.

But that predominantly went to farmers and to the distributors direct to farmers. So you wouldn't have seen that in service station numbers because, I think correctly, it's seeding time in rural New South Wales, and those farmers are pretty desperate for their diesel. So, we're already doing that.

The companies are doing that in consultation with us and that's a good thing. I think our approach at the moment is common sense, please, guys. You know, please.

I've said it, the Prime Minister's said it, the vast majority of Australians are doing the right thing. And I think, you know, it's important not to lump everyone in. Yes, there are some people, clearly, plenty of people going with jerry cans et cetera, or certainly have been.

There's also people, farmers, who maybe didn't.....weren't amongst those farmers who ordered up big early in the international crisis and are now trying to catch catch up and are ordering as much as they can, and that's fair enough and reasonable. So we certainly think that it's best at this point that we just really emphasise in the public communications, please buy as much fuel as you need, no more, no less.

We're at level two in terms of the schema that the premiers and the chief ministers and the prime minister agreed yesterday and that does say only buy the fuel you need, make voluntary choices to use less and avoid the impact of higher fuel prices. SALLY SARA: You're listening to Radio National Breakfast. My guest in the studio is the Minister for Climate Change and Energy, Chris Bowen.

Just to clarify, we've got this four-stage plan. What exactly is the threshold to progress to a higher level? Is it higher fuel costs?

Is it supply? How does that work? CHRIS BOWEN: Yeah, so we're at level two at the moment.

But if you look at level three and what the trigger is, for example, it says ongoing supply disruptions mean we will focus on getting fuel to where it's needed most. Now, ongoing supply disruptions really means the fuel supply to Australia been impacted. That hasn't happened yet, as you've heard me say thousands of times in recent weeks.

And I get it. People say, well, hang on, there's no fuel at the service station and Bowen says there's plenty of fuel. He must be wrong.

But in fact, I also have to tell the truth. There's been no cancellations of shipments to Australia in terms of every ship that we've expected to arrive has arrived. There were six cancellations of forward orders.

They've been replaced, more than replaced. So the supply of fuel to Australia remains strong. But, you know, we are in a highly volatile international situation where 20% of the world's oil has been impacted and more of the world's oil that's used by the Asian refineries has been impacted.

And so, we do have to be ready, and we are ready, and we have taken steps to maximise Australia's preparedness should the situation continue and/or worsen. SALLY SARA: Minister, the Shadow Treasurer, Tim Wilson, says the government is pouring debt petrol on the inflation fire, his words. Does he have a point when Westpac is predicting the RBA will be forced to hike rates three more times this year to deal with surging inflation?

CHRIS BOWEN: Well, I think clearly the Reserve Bank or the Treasury has pointed out, I should say, that this will help with headline inflation. Clearly, I mean, their proposal, given you raised the Opposition, I didn't seek to raise them, but given you've raised them, their proposal was to pay for their proposal by reducing measures of cost-of-living relief elsewhere.

We don't think that's the right approach. You don't make petrol cheaper by making electricity more expensive, which was their plan. I mean, they suggested cutting the home battery programme which is helping hundreds of thousands of people cut their electricity bills to zero, and also helping reduce prices across the board by having less reliance on expensive gas in the evening.

So we think their approach is the incorrect approach. Our approach is carefully calibrated. And importantly, the states and the Commonwealth yesterday discussed that GST cut, which is just you know that extra bit of cost-of-living relief, which we think is appropriate.

SALLY SARA: The government has introduced a bill to Parliament to support the continued flow of fuel imports. What will these proposed laws allow the government to do that it can't do already? CHRIS BOWEN: Yeah, it's a very important piece of legislation that the PM and I announced on Saturday and passed the House of Representatives last night and I hope and expect to pass the Senate today.

Really, it gives Export Finance Australia the ability to enter into loans, derivatives, guarantees, insurance with importers. The reason for this, Sally, is that last week a number of fuel chief executives said to me, we're buying fuel internationally, but it's getting more expensive and riskier, and there'll come a point where we can't commercially justify it, and that point is potentially coming soon, so we acted quickly.

Because if you've got a cargo in Korea, if I could just take a second to step this out because it's important, if you've got a cargo in Korea and it's $25 million more expensive than it was a couple of weeks ago, which is the case, and you're an oil company and you're looking at the oil price and saying, well, we can buy that now, but it'll take quite a while to get to Australia.

By the time it gets here, this war might have ended, and the oil price might have fallen and we're exposed. And if you do that multiple times, you're exposed to hundreds of millions of dollars of risk. That's not something we can justify to our shareholders.

But it is very much in the national interest for that fuel to come to Australia. So we thought that was reasonable, So we stepped in very quickly to say, well, okay, we can help you here. We can help you insure against that risk.

We can help you hedge. We can provide, you know, various financial instruments. If you've got a cargo that's become available, it's a spot cargo, it's an extra cargo.

It's not just your normal contract, but, you know, it's good for it to come to Australia. It might be in Korea, it might be in the United States. Come and talk to us and we will help you make that decision commercial when it's not.

So that means more fuel coming to Australia. We've acted very quickly. The Export Finance Australia has already been meeting with the fuel companies over the weekend and the expectation is Parliament passes so that we can get as much of that fuel to Australia as possible, certainly in coming weeks because, you know, it is an uncertain period internationally.

SALLY SARA: Minister, thanks so much for joining me in the studio. CHRIS BOWEN: It's been great, Sally. Thank you.

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