E&OE TRANSCRIPT
SUBJECTS: Federal Court action against AGL for overcharging Centrepay customers; nuclear power;
SHORTEN: Good afternoon, everybody. I'm here today to talk about the very significant victory that the Australian Energy Regulator has had against one of Australia's largest corporations, AGL. I'm the Minister in charge of Centrepay. Centrepay is a system where people on Centrelink and other welfare programs can have a direct debit facility where they are. If they owe money to corporations, it can be deducted from their Centrelink. However, we found since I became the minister that quite a bit of what's been happening at Centrepay doesn't pass the pass the pub test. In other words, we've seen some corporations basically overcharging people or are garnishing people's meagre Centrelink when they shouldn't have. So we've put in place significant reforms in the last couple of months to fix this problem for our most vulnerable. What Australians want is frankly quite amazing and stunning. Is it? The Australian Energy Regulator, along with other government agencies, had seen that AGL was basically harvesting our most vulnerable Australians Centrelink accounts inappropriately. So the Australian Energy Regulator took AGL to court and said that what was happening between 2016 and 2021 by AGL, where they were basically helping themselves to the poorest Australians meagre payments and are doing transactions which were not legal.
The Federal Court, in a landmark decision, has found there was something like 16,000 inappropriate transactions from 483 people's accounts. Vulnerable Australians were being taxed, overcharged by debts were being made, which weren't legal. So the Federal Court has awarded a $25 million penalty against AGL. And what we're seeing is 483 of Australia's most vulnerable citizens are getting some Christmas justice when they were picked on by the top end of town. AGL shareholders, I think, should be asking a senior AGL leadership how can you have a debt collection system which is misfiring like that and has now cost shareholders $25 million? And I also say to AGL, you better not pass the costs of your poor systems onto our consumers of electricity bills. Big corporations have paid a lot of money. They make a lot of profit. And frankly, the fact that they had a misfiring system for years and no one senior within the human level of management checking what their debt collection systems were doing is, are abysmal.
JOURNALIST: $25 million [inaudible] is that a significant deterrent?
SHORTEN: Well, I think the fact that the Federal Court has found against AGL - thousands of breaches, and that's what it is, has fined them $25 million. The actual amount that was being taxed out of people's accounts at this point adds up to about half $1 million, but the penalty system is based on the number of breaches. And this is an important message of deterrence to a whole range of large energy companies and other people. If you want to have a direct debit system against Australians, especially those on Centrepay and Centrelink, and you are breach it, you should be fined for every breach. It's not just the scale of the damage you cause, it's the asymmetrical relationship between AGL and a battler on Centrelink. AGL has a massive building behind me. They've got thousands of lawyers and accountants. What chance does an ordinary mum or dad, an ordinary citizen in regional Australia, have against this corporate colossus? And now the Federal Court has at least put itself as a shield between ordinary consumers. And congratulations to the Australian Energy Regulator and other bodies such as Service Australia and the ACCC, who have all watched this conduct and now action has occurred. I saw that it was between 2016 and 2021. The previous record was in 2022.
JOURNALIST: Have you have you seen a change in behaviour since then? Because obviously this is-
SHORTEN: I'll tell you one thing if AGL doesn't change its behaviour. This is a legal spanking, which means they will not sit down for a long time. The fact of the matter is that they should never have done this. We're fixing up Centrepay at our end. It is a privilege if an Australian company has the facility to get a direct debit payment through Centrelink off a Centrelink recipient. We've been working with civil society to tighten it up. Thank goodness there's a Labor government in now. I'll be honest, if you're a battler in this country, this outcome could only have been remedied under a Labor government and very conscientious actions of our Commonwealth public servants.
JOURNALIST: Hey, Bill. It's Amelia Terzon I'm one of the business reporters I was covering yesterday. Yeah, great. Um, I just want to know, did any customers advise Centrelink that AGL was charging them after their accounts were closed through Centrepay? Like, were customers coming to Centrelink saying -
SHORTEN: I'm not sure there was- I'd have to take that on notice. When I became Minister, we certainly detected that Centrepay was misfiring or not being used properly by corporations. But I think for a lot of these people, the money just goes out. And, you know, like all of us, we've all got charges that come out of our accounts and you tend to trust people who send you these bills. Uh, so the big lesson here is that for big corporations, the duty of care is on the corporation. If you're an individual without a lot of money, without a lot of time, you know you don't have the wherewithal to take on a colossus, a sort of a corporate leviathan. Uh, the duty of care rests with these big corporations who get access to these people, not to abuse that trust. So I'm, you know, I think this is a a belated Christmas present for the battlers of Australia. Because I tell you what, every energy company, every utility company, every large corporation with direct debit systems will be put on notice. Do not overcharge. Do not keep tickling people's accounts long after the service is finished or long after the debt has been resolved.
JOURNALIST: So so Bill, though, but my question gets to the heart of what did Centrelink know and how long did it take to fix this situation? Like did it know about AGL taking this money incorrectly?
SHORTEN: I don't know what evidence was offered in the court case. Um, but I know that since I've become minister, we have overhauled Centrepay systems. I can't speak to what Centrepay. This whole incident occurred under the liberals. I don't know what, um, Scott Morrison or the liberals knew, but since I've come in in 2022, we have overhauled the Centrepay system.
JOURNALIST: And should AGL be banned from Centrepay now?
SHORTEN: That's a pretty good point. Uh, I'll raise that with, uh, our people, because I think that it is an abuse of trust.
JOURNALIST: And I'm aware that three other power companies have been referred to the regulator. Who are those other three power companies?
SHORTEN: I'm aware that the regulator is looking at three other major Australian power companies. I wonder if these power companies are waiting to see if AGL appeals the size of the penalty. These companies will take their own independent legal advice. But my view is that for other power companies who are in the gun for this behaviour. Do not wait till you go to the Federal Court and you cop a big fine. My advice is if you are a corporation in Australia and you suspect you have this problem, resolve it now with the regulators. Do not make the taxpayer go through to the, you know, the expense of court action. You know, it's I don't run these large power corporations, but if I was a shareholder and a large power corporation, I'd want to know if my company had broken the rules and breached the laws in these years. And I think the corporations, either you clean up your own house quickly with a regulator, or expect a very big broom to come through your operations very soon.
JOURNALIST: In terms of the fine, I know you're saying 25 mil is a big spanking for the company, but they are saying that they don't expect it to impact their profit margins for this financial year. They're still on track to make up to $730 million in profit on the line. So is 25 million really a legal spanking?
SHORTEN: If they think the $25 million is a, uh, just a day, a day at the beach for them. I think that would be the worst example of corporate communications since the people who were, you know, promoting the Titanic. The reality is that if you think that $25 million is just a speeding fine, then you are so out of touch. I think the Federal Court has done the right thing. When you look at the scale of the transaction, it's not just the scale of the victim's losses. What matters here is thousands of breaches by corporations who should know better. They have enough money in their $710 million to hire a couple of switched on individuals to make sure they're not debt collecting illegally or breaching laws.
JOURNALIST: And the company has also said that it will look at the judgment and consider whether it should appeal. Would you support it appealing?
SHORTEN: Corporations have legal rights in this country. I'm not going to say that they don't. But if I was doing the government relations reputation management for AGL, I would look in the mirror and say, really? We've been caught out essentially unlawfully taking money from some of the poorest people in Australia, and we're not happy that we got caught out in the fight and we want to appeal it. That would show, I think, a corporate amnesia about what's really important here, what really important is a company's values. They did the wrong thing. They've copped a fine. And as a result, I you know, I think the best thing you could do is put a big ad in the newspaper and say, "Sorry", but anyway, that's up to them. And if they want to appeal it, that's their legal rights. But I think it was a strong decision. And of course, why would a corporation want to keep reminding everyone of what a bad corporate citizen they've been anyway? How the mind of some of these corporate people at the very top work is a mystery to me, and I think millions of other Australians. The real thing is they should never have done it to begin with. Not have some existential navel gazing with lawyers about how much money they're going to spend appealing being caught out.
JOURNALIST: Just on another issue, the Australian Labor Party has posted a video on social media about nuclear energy featuring Dr Margaret Beavis, claiming that there are significantly higher rates of leukaemia and childhood cancer in people living within 50km of nuclear power stations. Has the Labor Party independently verified those facts, or done any of its own research to back up those claims?
SHORTEN: I haven't seen the particular ads, but I don't think it's a secret in this country or around the world that nuclear power is a mixed blessing, and there have been a very severe health risks associated with Fukushima, with Chernobyl. So, you know, if Peter Dutton doesn't like the heat in the kitchen, he should get out. He's proposed a fantasy nuclear figure. His costings are, if you believe them, I've got the. I'm happy to sell you the Westgate Bridge. If you think it's only going to cost that. Um, yeah. And if Mr. Dutton doesn't like the fact that some people are raising safety issues around nuclear power. Well, it's called evidence, my friend. Evidence.
JOURNALIST: What evidence does the Labor Party- The Labor Party's claiming-
SHORTEN: Oh, no- Chernobyl? Fukushima?
JOURNALIST: Just living next to a- one that hasn't melted down. She's claiming the significantly higher risks. Do you personally believe that child living living near a nuclear power plant?
SHORTEN: I'll tell you what I believe. I'll tell you what I believe. I'm not going to buy a house next to a nuclear plant anytime soon, and I don't know if you are. And I don't really want my kids playing next to a nuclear power plant, so, you know, these are just the real world. I'm not going to tell Australians where they can live or how they should keep their kids safe. But I have a hunch that most mums and dads - they're not going to say, “oh goody, a nuclear power plant is going to be built near my house”. Like, it's not great for housing values, is it?
JOURNALIST: You don't feel that this is a scare campaign?
SHORTEN: I think that the idea that we're going to have hundreds of billions of dollars of taxpayer expense to create a government run nuclear industry is scary. I think it's an economic nightmare. Can we just tell the truth? Peter Dutton's been trying to keep the right wing of his party happy. It's very hard in opposition to keep everyone happy. So he's given them a bit of red meat on this nuclear policy, and now it's got away from him. And now we're quite unbelievably talking about a policy which everyone might like to talk about in the front bar would nuclear work or not. But when you've got to pay the bills for it, when you think it could be in your neighbourhood. I'll tell you what, attitudes change. Okay. Thanks.