Wednesday, 5 December 2018
Treasury Laws Amendment (Prohibiting Energy Market Misconduct) Bill 2018; Second Reading
What a shambles. I've said before that this minister and his factional colleagues on the back bench—the member for Hughes; the member for Warringah, the former Prime Minister; and various others—worked so assiduously at tearing down any attempt by former Prime Minister Turnbull to develop an energy policy that had the support of business groups, had the support of state governments and had the potential for support from federal Labor to be a bipartisan solution to the energy crisis. They worked so assiduously at tearing everything down: the emissions intensity scheme; the clean energy target that was recommended by Alan Finkel, the Chief Scientist, in response to a request from this government; and the National Energy Guarantee, a policy that the now Prime Minister said had a broader level of support than any other measure he had seen in his 10 years in this parliament. They were absolutely assiduous in tearing those down. You have to recognise their level of determination and hard work to tear down those policies.
The problem for the new minister is that he is like the dog that caught the car. They've given him responsibility for fixing the mess that he, the member for Warringah, the member for Hughes and their hard Right factional colleagues have all created, and he has absolutely no idea how to do it. This fellow who comes in and continues to boast about his business experience, his education and the amount of modelling he's done actually has no idea how to come to grips with this deep energy crisis that is gripping and challenging the viability of businesses across the nation and household budgets across the nation.
This is what he's got. He's got two policies. The first is this Venezuelan style neo-Marxist intervention into the market, into the NEM—this legislation we're debating today. The second is the idea of chucking literally billions of dollars of taxpayer funds to build new coal-fired power stations that private investors will not touch with a barge pole, with the exception, of course, of Clive Palmer—the only private investor who said he will partner with this government in building new coal-fired power stations, just after he's finished building Titanic II. Not only are they throwing money at getting the thing built, but this minister has said he is willing to grant a taxpayer funded indemnity against future carbon risk to any of those operators of new coal-fired power stations. The Australian Industry Group—not Greenpeace—has estimated that that indemnity would be worth $17 billion just for one coal-fired power station. They want to build more than that. We see reports in newspapers. Just for one coal-fired power station, which private investors won't touch, this minister is willing to write a cheque of $17 billion of taxpayer funds—not his own—to indemnify that operator against future carbon risk. This is not a policy. This is an embarrassment—as the shadow Treasurer said, 'an embarrassment to this parliament'. It is an embarrassment to what on this side we recognise as a proud legacy of the Liberal Party, over seven decades or so, of respecting free markets. What we have is this shambles of policy after policy after policy.
My colleague the assistant shadow minister for climate change and energy has pointed out that in the dying days of Malcolm Turnbull's prime ministership—in large part due to the constructive intervention by my friend the member for Hughes—there were four energy policies from this government in just 14 days. This week we've had two energy policies from this government. It's still only Wednesday evening, so we might have more than two. As far as we can count, this government is now up to 10 energy policies just in this term of parliament. They are all characterised by internal division, ideological disputation and a bit of personal ambition thrown in—like the member for Hume, who is now the energy minister.
Now this government wants this House to deal with one of the most sweeping changes to the investor climate in this country's history in less than 24 hours. We asked for a briefing on this legislation last Monday, 10 days ago, and we heard nothing from the Treasurer or his office, or from the energy minister or his office.
The Queensland energy minister has made clear, in a number of pieces of correspondence, that since this policy was announced he wanted some detail. As a member of the COAG Energy Council, as effectively the shareholder owner of substantial electricity assets in Queensland, he wanted some detail about how this would impact Queensland electricity assets and Queensland consumers, and he has heard nothing from this government. Business hasn't seen this. Other stakeholders haven't seen this legislation. The crossbench and the opposition haven't seen this legislation, until a few hours ago. This is legislation that has extraordinary implications, runs to several dozen pages and is supported by an explanatory memorandum that runs to more than 100 pages.
As a process this has been a shambles, but the more serious concern is a matter of substance, because what we know this policy or this legislation would do if it were passed by this parliament is to smash what remains of investor confidence in a sector that is already reeling from this coalition party room's decision to kill the National Energy Guarantee. The NEG was a policy that was supported by every single business organisation in this country, energy companies and, more importantly, energy users. It was supported by every state government, Labor and Liberal alike, and would have been supported by an overwhelming majority of this House of Representatives if the former Prime Minister, Malcolm Turnbull, had had the confidence—as the member for Leichhardt pointed out this morning, had had the courage—to put the matter to a vote.
We know that investor certainty and confidence in this industry are already at record lows. Pushing them further down will have only one consequence for consumers, and that is to push power prices up even further than they've reached under this government. The first question that the reasonable, objective observer who's perhaps new to the energy policy debate in this county—lucky them—might ask is: where did this idea come from? Did it come from the consumer watchdog, the ACCC, a body empowered by this parliament specifically to look after the interests of consumers? And, coincidently, it is a body that has spent the last 18 to 24 months involved in an exhaustive inquiry into the operation of the electricity market. If this idea of divestment was in the interests of consumers, you'd think perhaps that the consumer watchdog, after that inquiry, might have recommended it among the 56 recommendations it made to government about how to reduce power prices for consumers, households and businesses. Well, it didn't.
I heard the Prime Minister quote selectively from the ACCC report—this very extensive report, an excellent report—apparently to support the legislation that we're now debating. He selectively didn't include this quote from the ACCC:
Requiring the divestiture of privately owned assets is an extreme measure to take in any market, including the electricity market.
… … …
… the ACCC does not believe it would be appropriate to intervene to unwind the way in which the market has evolved across the NEM—
the National Electricity Market. Maybe the Prime Minister thought the ACCC had changed its mind, that Rod Sims had changed his mind about this. After the announcement by the Prime Minister, and I think the Treasurer, of this divestiture policy, which came out of nowhere—not supported by the Harper competition policy review of several years ago, not recommended by the ACCC—perhaps he thought that Rod Sims might have changed his mind. On the morning of that announcement Rod Sims was in a Senate estimates hearing and he was asked whether he'd been consulted about this announcement. He said in Senate estimates:
I think I can confidently say I found out about it when everybody else did: when I read about it in the newspaper.
… … …
And I guess, divestiture is such an extreme step that we felt that judgement would be very hard to reach.
… … …
But that was the judgement we reached, and our view hasn't changed.
So the ACCC certainly didn't recommend it, and it remains, it would appear, of the same view.
Perhaps business groups that use a lot of energy, that have the biggest energy bills in this country and perhaps the best understanding of the way in which energy markets are bearing upon consumers, would have thought this would be a good idea for them and would help bring power bills down. Well, no, they don't. All the business user groups of energy have said that this—to use their language—involves a deep and genuine sovereign risk, one that will further undermine investor confidence and push power prices up, not push them down. Indeed, the head of the Business Council of Australia, Jennifer Westacott, wrote in The Daily Telegraph today:
It is surprising to see this legislation proposed by a Liberal Government. This is the kind of intrusive, heavy-handed intervention into the market you would expect from the Greens.
The shadow Treasurer says perhaps neo-Marxist Venezuela. The Greens, Venezuela—I think you get the picture. She described it as 'ill-conceived and rushed policy' that won't achieve what is desperately needed—lower electricity bills for families and for businesses.
Clearly the ACCC hasn't recommended it. Business doesn't want it—and I'm not talking about the energy companies. Of course they don't want it; you'd expect that. I'm interested in what businesses that use energy, not supply energy, want: the Energy Users Association, the Australian Industry Group, the Australian Business Council, APPEA. Those are the business organisations that understand this industry and have rejected this legislation as dangerous, as reckless and as something that will only exacerbate the deep energy crisis that has emerged under this government.
But today we've also learned that there is an even more sinister motivation behind this legislation, and that was when the Minister for Energy confirmed that the state of Queensland was, to use his words, on notice that this power would be used to privatise publicly owned Queensland power assets. We know that privatisation as a general proposition, but particularly in relation to this essential service of electricity, is in the coalition's DNA. Indeed, in 2015, when New South Wales was pondering privatisation of electricity assets, the now Prime Minister promised the people of New South Wales that privatisation would lead to lower prices. Well, I think New South Wales households understand whether or not that promise came to pass. Their household power bills have been going up and up and up under this Prime Minister—both as Prime Minister and as Treasurer—and under the Berejiklian government.
Privatisation has not delivered for consumers. We said it never would and, unfortunately, we've been shown to be right. This, of course, is the supreme irony in this debate—that they're seeking to look like they're going after the big energy companies. These are the companies to whom the Liberal Party in South Australia, in Victoria and in New South Wales handed control over this essential service. This is the party that told them: 'We want you to run the market. We know this is an essential service, it's a public good, but we want the private companies to make a profit out of it instead of having it run by state governments.' The supreme irony: the coalition complaining about the behaviour of private companies that you gave control of this essential service to. They're not content with privatisation in South Australia, Victoria and New South Wales. It's quite clear that they now have Queensland in their sights. They have Tasmania in their sights. They have Western Australia in their sights, a matter that will be of particular interest to you, I'm sure, Deputy Speaker Goodenough. They have Snowy Hydro in their sights, after John Howard wanted to privatise it in 2006. They have the electricity assets of the Northern Territory in their sights as well.
Don't take my word for it; it's all over the media now. On The Australian's website there is an article, published only an hour or so ago, 'State-owned energy giants in fed sights', which might have elicited a bit of interest in the state of Queensland, which has had a few debates about privatisation of electricity in recent elections. There is an article in The Courier Mail, published only about half an hour ago, headed 'Queensland political parties united in opposition to the PM's new electricity asset sales threat'. The opposition leader Deb Frecklington—she is from the Liberal Party, I think—has also dismissed the federal government's divestiture threat. She said:
I don't support the Federal Government's plan. The people of Queensland have spoken in relation to the sale of assets and there is no appetite for that.
The PM's plan is out of touch.
It is not just the member for Curtin and a whole range of other members on the coalition backbench who didn't like divestiture version 1 last week or divestiture version 2 this week. People are starting to understand what this is all about. This is legislation that will push up power prices and it's legislation that will continue the agenda that this coalition ideologically has pushed for 25 years: to hand control of this essential service from government into private hands—in Queensland, Western Australia, Tasmania and the Northern Territory, where they haven't been able to do it at the state level, and also in relation to that great national asset Snowy Hydro.
This is a stunt by a government that has no energy plan. Three months ago there was this feeding frenzy in the coalition party room by the member for Hughes, by the energy minister, to get rid of Prime Minister Malcolm Turnbull and to dump the National Energy Guarantee. When they finally succeeded—maybe they didn't think they would—they woke up the next morning and thought, 'What do we do now?' The dog that caught the car. 'What do we do now?' And they've come up with this. Really, Bob Menzies would be rolling in his grave. That proud Liberal legacy of market economics is lying absolutely dead after this legislation was proposed.