Michael McCormack (Riverina, National Party) Share this | Hansard source

The Competition and Consumer Amendment (Australian Energy Regulator Separation) Bill 2025 is intended to separate the Australian Energy Regulator from the Australian Competition and Consumer Commission. This will enable the AER to be an independent body with its own board under the Public Governance, Performance and Accountability Act 2013. The AER has been around since July 2005. By the year after that, all 13 bodies previously responsible for energy regulation had transferred responsibility to the AER. We know that decisions made by the regulator are subject to appeal, as you would expect.

Many years ago the energy grid was the responsibility of the states. Certainly states looked after power. These days, of course, more and more onus is placed on the Commonwealth, whether it's to run power or whether it's to fund state schools. I appreciate that the states still make up the bulk of the funding for this, as they should, but there is more and more pressure on the Commonwealth—on taxpayers—to foot the bill for things which used to be solely the remit of the states. It happens in health, too, and certainly both sides of this parliament have overseen a transition whereby the Commonwealth is picking up the tab for what was once very much the remit of the states.

The AER is part of the Australian Competition and Consumer Commission. It enforces the rules established by the Australian Energy Market Commission. The ACCC, for all of the complaints it sometimes receives, does a good job, I believe, and I say that having been a minister with oversight responsibility for the commission. The ACCC has done some very good work over the years. Of course there's always more that it could do in all areas of endeavour, not the least of which is market deregulation, with the monopoly of the supermarkets, and even irrigation and water. We need to ensure that the ACCC, through a regulatory and legislative process, has the teeth to do the work that it does for and on behalf of the nation and for and on behalf of consumers.

The AER's present functions are focused on regulating the natural-monopoly transmission and distribution sectors of the national electricity market. It very much overseas monitoring the wholesale electricity market, enforcing electricity market rules. It's a difficult area. The AER's regulatory functions and powers are conferred upon it by the National Electricity Law and the National Electricity Rules, which govern all of these things.

We've seen quite a debate in recent hours, days, weeks, months, years and decades over energy prices and energy regulation. The default market offer, set by the Australian Energy Regulator, shows that average power bills are up as much as $806 per household. This is having a very harsh effect on ordinary, everyday Australians. I know it's so difficult—for farmers, factories, manufacturing and people just trying to manage household budgets—to pay the energy bills, which just seem to go up and up.

In the bill before the house, the changes being recommended come from several reviews. The Vertigan review of 2015 suggested that the AER should have full control over its management and finances by becoming an independent entity. The Finkel review, two years later, highlighted that the AER's separation from the ACCC had not yet occurred. That particular investigation discussed how information sharing could still be maintained. Then we had, in 2020, the Edwards review, which noted that many in the energy sector supported the AER's independence and better governance of the energy market, so to speak.

As I say, the energy market is a large and complex thing; we only have to look at what is going on in the energy systems at the moment. The government wants us to go renewables only. We have 28,000 kilometres of transmission lines being proposed and being constructed. This is having a huge effect on regional communities. Not that long ago, I went up into the old Tumbarumba shire area—what is now the area of Snowy Valleys Council—to look at the transmission lines being constructed there. I note with some concern that the metal frameworks are not being built with Australian steel. That is a shame, but there is a lot going on in this space.

At present, the AER does not employ its own staff. Instead, employees from the ACCC assist the AER in its functions. The ACCC chair is responsible for managing the staff and ensuring that the duties of the AER are indeed met. The Australian Energy Regulator is already established as a body corporate pursuant to section 44AE of the Competition and Consumer Act, and it's constituted by five members pursuant to section 44AG of that particular act. Section 44AAL currently provides that the ACCC and the AER are a single listed entity for the purposes of the finance law within the meaning of the Public Governance, Performance and Accountability Act. I had some carriage of that when I was the parliamentary secretary to the Minister for Finance at the time, Senator Matthias Cormann. He did an outstanding job in that portfolio. The chair of the ACCC is the accountable authority of that listed entity. Section 27 of the Competition and Consumer Act currently provides that the staff at the ACCC are to be engaged under the Public Service Act 1999, that the ACCC chair and staff together constitute a statutory agency, and that the ACCC chair is the head of the statutory agency. It's a lot to place on the ACCC chair. Whoever is in that job does an outstanding job under a lot of pressure. There are a lot of moving parts in that particular role.

We should be thankful for our Public Service. Our Public Service serves the Australian public in a very diligent and thorough way, and I think we saw that best during the COVID-19 pandemic. What we saw then was public servants working so very hard, not only on the health side of things to ensure that the safety, wellbeing and health of Australians was paramount, first and foremost, but also on the JobKeeper provisions that were put in place by the coalition government at the time. They kept the doors of business open, kept the lights on, kept the bills being paid and kept the economy ticking over. We should be very, very thankful for what our public servants did. There was no finer public servant at the time than Dr Steven Kennedy. I know he's had a number of roles as secretary of various departments. He looked after Infrastructure and he looked after Treasury. The work that he did during the global pandemic saved lives and kept people's businesses from going insolvent—from going bankrupt. I owe him an eternal debt of gratitude for the work that he did. I say that in all earnest honesty. He was outstanding.

On this bill, section 44AAC of the CCA currently provides, as I say, that the ACCC chair does make staff and consultants available to the AER to assist the Australian Energy Regulator to perform its functions. At times, that is required, requested and needed. The combination of these arrangements means that, while the Australian Energy Regulator's regulatory functions are entirely separate, as they should be, from the ACCC, the current accountable authority and the head of the agency is the ACCC chair. They hold statutory accountability for meeting the requirements of the PGPA Act and the Public Service Act. In essence, the buck stops with the ACCC chair—one could say, as it should.

These governance arrangements were considered appropriate when the Australian Energy Regulator was first established, 20 years ago. As to the bill's intention, the AER's statutory functions and powers, and the number of staff required to assist in performing these functions and powers, have materially changed over those two decades, and, as the Public Service changes and modernises, you have to bring these sorts of bills before the parliament to keep up with those changes in the Public Service.

This bill was introduced to parliament last year. It passed the House earlier this year, but it wasn't considered by the Senate prior to the May 2025 election.

In the lead-up to the election, it was our clear view, as a coalition, that the government should be focused on lowering the cost of electricity and not making bureaucratic changes. That was the view we had then. We still believe that the government should and must do more to focus on lowering those power bills and to do whatever the government can do, indeed, to bring energy prices down—not because it's a political debate, not because it's something that we can differ from the government on in this chamber, but because people out there in our electorates right across the nation are demanding, are crying out, are pleading, for energy relief.

I appreciate that the government has brought in some subsidies, and they will say, 'Well, this is designed to help those ordinary, everyday Australians doing it tough and struggling.' But we can't impoverish pensioners. We can't see the likes of Tomago going to the wall.

The Tomago aluminium smelter and plant uses up about 10 or 11 per cent of New South Wales's power, and having it not functioning will indeed lower emissions, and that might meet the Minister for Climate Change and Energy's remit in trying to bring emissions down. But that's not the point, is it?

The point is that we cannot de-industrialise our nation. The point is that we have to give our farmers the reliable, affordable energy to be able to grow the world's best food and fibre. The point is that we have to make sure that Mr and Mrs Average out there can pay their power bills and so can pensioners. Right across the board, it is not right—what we're doing at the moment.

That is why we opposed this particular bill when it was first put on 24 July this year. The member for Wannon, in his capacity as the shadow minister for energy and emissions reduction, as well as the shadow assistant minister for energy and emissions reduction, Senator Dean Smith from Western Australia, were briefed on this bill.

We see the need for it, given the fact that, as I say, the Public Service has modernised. We understand why it is necessary. But, again, I do implore those members opposite: when we are talking about the Australian Energy Regulator, when we're talking about the power grid and when we're talking about servicing the nation with reliable, affordable energy, the government must do more. It has to bring about policies, and use those levers that it can, to help the economy and to help the Australian people that it purports to serve.

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