Politics with Michelle Grattan

Alan Finkel on the future of Australia’s energy market

Despite the government still considering his proposal for a clean energy target (CET) – after endorsing his other 49 recommendations – Chief Scientist Alan Finkel is optimistic the CET remains firmly on the agenda.

Finkel’s challenging task has been to put forward a scheme to bring Australia’s energy market into the future, providing certainty for investment and supply. His plan has required a balance between appeasing consumers on prices and meeting Australia’s commitments on climate change.

This is made harder by the desire of many in the government to push on with developing new “clean-coal-fired” power stations, a term Finkel describes as “a murky concept”. “There is no prohibitions in any of our recommendations. The government has to decide whether to license new technologies,” he says.

Asked about the concept of “reverse auctions” – better called competitive tenders – he says this is “widely recognised to be the most cost-effective means of bringing the lowest cost solution into the market”. But that’s dependent on the wisdom of the entity running the auction rather than the wisdom of investors.

Overall, Finkel acknowledges there’s a hard road ahead for policymaking on energy. “Transitions are always painful,” he says.

Gladys Berejiklian on the need to reform federal-state partnerships

NSW Premier Gladys Berejikilian is alert to the challenge of operating in today’s difficult electorate. “The digital age has brought a sense of empowerment. It’s brought a sense of greater appreciation of democracy and the political process and we need to not only respond to it but adapt to that and make sure that we are listening during our term in office, not just at election time.”

With her government having just handed down a budget with an enviable surplus, she says the federal government’s Gonski legislation will leave NSW better off “in terms of dollars”.

But she is very concerned about what she sees as an urgent need to review the numerous and “clumsy” federal-state partnerships. She’d prefer a more fundamental overhaul but that’s not on the horizon. “I don’t want piecemeal reform - I would prefer to have wholesale reform but I can’t see that happening in the near future and for that reason I think as a state leader I have to deliver as much as I can under the existing circumstances”.

Josh Frydenberg, George Christensen and Mark Butler on the Finkel review

Malcolm Turnbull declared on Wednesday he'd "provided decisive leadership on energy". It is a claim perhaps better cast in the future tense.

The debate over the Finkel panel's recommendation for a clean energy target (CET) is just beginning, and already it is clear that reaching an outcome that brings the certainty the business community needs to invest will be a hard slog for Turnbull, who will be undermined by critics on his own side.

In this podcast we talk Finkel with Energy Minister Josh Frydenberg, Nationals backbencher George Christensen, and opposition climate spokesman Mark Butler.

Frydenberg, charged with the detailed heavy-lifting, tells Michelle Grattan: "We have to work together as a team to land this difficult policy area."

Christensen proudly wears the agrarian socialist title as he advocates for radical changes to the regulation of Australian energy prices. "Being bold is the answer and market intervention has to happen." He's sceptical of a CET without seeing the modelling and data.

Butler believes a CET is workable but it has to be consistent with principles, which means such a scheme shouldn't incorporate so-called "clean" coal. "The discussion of the Finkel report shouldn't include concessions for the hard-right-wing," he says.

John Blaxland on handling Islamist terrorism

Events in Britain, the New South Wales coroner’s report on the Lindt Cafe siege, and a new attack in Australia have given a much sharper edge to the debate about how to handle Islamist terrorism.

Amid the hype, ANU security expert John Blaxland provides a reality check. He says while there’s an escalation of and change in the nature of terrorist attacks, collaboration between Australian police and intelligence services is world class.

On the Lindt Cafe siege, Blaxland says that although in hindsight the police could have done things differently, it’s “preposterous” to insist the special forces were required to resolve it. “We actually need to be very circumspect about over-committing our military.”

He’s sceptical of the push for a homeland security department, saying a “refined set of arrangements” is in place for interdepartmental co-operation.

On the question of the local Muslim population, he says most don’t subscribe to a fundamentalist, expansionist Islam – violent jihadists are outliers. “They’re people that have been on the edge, if not mentally then certainly socially.”

Speaking about this week’s revelations of Chinese influence in Australia, Blaxland says the scale is enormous and unprecedented. “We have had an ongoing growing tension emerge between our security and strategic consciousnesses and our economic consciousness.”