Tony Smith (Speaker) Share this | Link to this | Hansard source

I have received a letter from the honourable member for McMahon proposing that a definite matter of public importance be submitted to the House for discussion, namely:

The Government's irresponsible forced divestiture energy policy.

I call upon all those honourable members who approve of the proposed discussion to rise in their places.

More than the number of members required by the standing orders having risen in their places—

Chris Bowen (McMahon, Australian Labor Party, Shadow Treasurer) Share this | Link to this | Hansard source

We all know that the dysfunction and chaos at the heart of the Abbott-Turnbull-Morrison government comes with a very big cost, and we saw that cost, at least in part, in the national accounts, the economic growth figures, today. Economic growth is down, household consumption is slow and household savings are at a 10-year low. We saw that lack of confidence, that concern about the uncertainty at the heart of our government, reflected in the figures today.

But we also see it when it comes to the energy policy—or perhaps, more accurately, the lack of an energy policy—that we have from this government. This is a government which has proven itself to be pathologically incapable of providing our country with an energy policy. It is just not up to the job of providing the country with the framework necessary to invest in energy generation. This is a government that wasn't able to adopt its own Chief Scientist's recommendation for a clean energy target. The whole party fell apart at the very thought. Then they weren't able to adopt the National Energy Guarantee, which we were told was vital to putting downward pressure on prices. It didn't fall as a result of the operation of this parliament. It fell as a result of the operation of that party room. It fell under its own weight.

Now we have the fig leaf for a policy, and I use the term 'policy' very lightly—the fig leaf, the alibi for an energy policy which is the big stick: the divestment policy. I never thought I'd see the day where a supposedly free-enterprise government would concoct such a preposterous idea, which, they assert, will put downward pressure on prices, when, in fact, it will put upward pressure on prices because it will chill investment.

We know the Prime Minister's happy to make all sorts of claims. I was taken by one he made last week. He took to Twitter. He's had a very patchy track record on social media since he became Prime Minister, the poor old Prime Minister. But he said this—and let's just break down this tweet, this Prime Ministerial statement on Twitter:

We're bringing electricity prices down. Our big stick legislation is pressuring energy companies to give Australian families better prices. And it's working.

Here's the problem with the Prime Ministerial boast: the divestment policy had not, at that point, even been introduced to parliament, let alone been implemented and been working. It has changed dramatically from the time he made that statement. It was rewritten overnight by the Treasury because it had again imploded under the weight of the Liberal and National parties, and it is not putting downward pressure on prices.

What we know is that wholesale power prices have doubled under this government. Under the Abbott-Turnbull-Morrison government, wholesale power prices have doubled. Also, in futures pricing, we're seeing that the market has worked out what's going to happen next. The market knows what's going to happen next, and the market is pricing in a further 40 per cent increase, when prices have already doubled under this government.

What have they got? What has this minister got? He's got a poor, weak excuse for a policy. He's got a small and weak policy, not a big stick, and it has fallen apart. It has failed a few tests. There is the small matter of whether it's constitutional or not. I've got a pretty low bar and a pretty high tolerance when it comes to policies from this government because I've seen all manner of mistakes, but the first test for a Prime Minister and a minister is to check whether their policy is constitutional. Maybe check and see whether it complies with the vibe. That would be a good start. But we've seen constitutional experts point out—and their case seems pretty logical—that it would fail under a High Court challenge. That's a pretty big problem for a government. Then, of course, we've got the problem that it has fallen apart at the hands of those who sit behind the minister.

I'm going to do something you won't hear me do every day in this House: I'm going to pay a compliment to some of those opposite, because the other policies have fallen under the weight of the climate change deniers on the other side. The clean energy target and National Energy Guarantee fell under the weight of those who do not accept the climate science, those who said the government shouldn't have an electricity policy—the intellectual giants like the member for Hughes and others on the other side who claim that climate change isn't real or isn't caused by human activity and that therefore they shouldn't have a policy. They're the ones who've killed the first policy. This policy has been killed by those honourable members opposite who actually have some understanding of economics and who actually have some understanding of the principle that if you create more uncertainty, and if you create an environment of instability, you will get less investment and not more. They're the ones who've killed this policy, who've rolled the minister and rolled the Treasurer. They're the ones who said, 'We're not having any part of this policy.' Yet again we see the dysfunction at the heart of this government, meaning that the country rolls on without an energy policy.

We know that what we need is more investment, not less. What we need is a policy which actually encourages people to invest in energy generation. What we need is a policy which actually provides people and investors with the certainty to know that their environment is stable and that there won't be sudden changes to government policy. With this government you don't know if there's going to be a sudden change of Prime Minister or not, and you also don't know if there's going to be a sudden change in policy.

We could accept the policy if we thought that it would put downward pressure on prices. But expert after expert in the industry, and beyond the industry, have said that it would put upward pressure on prices.

This is a minister who is about to get to the despatch box and accuse us of being too close to big business. That's what he's going to do. A few weeks ago in an MPI this minister would have been arguing that we should give billions of dollars worth of corporate tax cuts to the very same energy companies. He's about to launch an attack on them. He's about to say, 'The problem with Labor Party is that they're far too pro-business.' He's going to say that's the problem with the Labor Party: 'Those terrible socialists over there have been listening to business too much again.' That's what he's going to say. I'm going to say: 'Listen to the minister. It's going to be a cracker, because this bloke has said all over the country that the Labor Party is too close to big business.'

I'll tell you who we're close to: Australian consumers. And I'll tell you who we'll stand up for: Australian consumers, who should have a government putting downward pressure on prices, not upward pressure. We'll stand up for consumers who want an energy policy which actually embraces the future. I'll tell you what: I know who'll give Australia an energy policy. A Shorten Labor government will give Australia an energy policy. Only a Shorten Labor government will double the investment in the Clean Energy Finance Corporation. That's what we'll do. We'll provide an additional $10 billion in capital for the Clean Energy Finance Corporation. Only a Shorten Labor government will create an independent energy security and modernisation fund, because we're not afraid of modernisation. We don't shy away from modernisation; we embrace it. We don't pretend it's not happening, like the economic vandals who sit opposite. We embrace it.

Only a Labor government will implement a new energy productivity agenda. Only a Labor government will provide grants for Australian manufacturers to help them reduce their energy usage. I'll tell you what: only a Shorten Labor government will assist households doing it tough to install batteries to reduce their power prices going forward. They laugh; they don't like batteries. They don't like the future. Now we're too much on the side of Australian consumers, according to those opposite.

Only a Shorten Labor government can do these things. We're not going to engage in this crazy Venezuelan-style intervention. I have considered apologising to the government of Venezuela for the terrible insult of comparing them to this unstable government, but I think the comparison stands.

What we will have is rational policy with stability of personnel and stability of policy. We'll provide that stability through good leadership and through stable leadership. We've had five years of leadership on this side and the revolving door of Prime Ministers and ministers on that side. What we'll provide is policy certainty for business and for consumers. What we'll stand for is good policy in the interests of consumers. We don't need a slogan like 'big stick'. What a pathetic little slogan you have. What a pathetic little slogan this government has. The government of Australia is reduced to this pathetic slogan. I thought three-word slogans were bad enough, but now we've got two-word slogans put on this policy. That's what this pathetic government has been reduced to. Australia deserves better than that. Australian consumers deserve better than that.

Australian consumers deserve a government that actually believes in something. I say this: at least Malcolm Turnbull had some beliefs he could betray. At least he had something to betray. This Prime Minister and this Treasurer don't have any beliefs to betray in the first place. This minister makes his bosses look good, that's what he does, because he's not up to the job and he's got a pathetic excuse of an alibi for a policy.

Angus Taylor (Hume, Liberal Party, Minister for Energy) Share this | Link to this | Hansard source

What an extraordinary display we have just seen. At the beginning of question time we heard the Leader of the Opposition railing about the growth of profits in the economy—back to his old Marxist roots—and then, minutes later, he was standing there defending energy companies who were delivering record profits at the expense of hardworking Australians—small businesses and families. He was standing there defending the Queensland government that last year took over $2 billion out of the pockets of Queenslanders—hardworking Queenslanders like the team I met a couple of weeks ago from FLIT Fitness, who saw their electricity bill per quarter go from $500 to $2,000. That's $1,500 being taken out each quarter and going straight into the coffers of the Queensland government, which means that profits are okay if they're in the hands of the Queensland government. They like them being in the hands of the Queensland government, because the Queensland government has broken its budget, and the people of Queensland are paying for it.

We stand for a sensible, balanced policy and for reliable, affordable electricity—electricity that works 24/7, not like your pink batteries, which go for an hour in a 12-hour night, but sensible, affordable, reliable power that works 24/7. We do stand for lower electricity prices, and we're seeing exactly that, with our price safety net, with the reductions we have seen, under pressure from the government, from energy companies across the board. Half a million Australian families and small businesses will see a better deal, even if they don't have time to get on the phone each year to negotiate a better price. Those households on standing offers will see a better deal in New South Wales of, on average, $200 a year; in Victoria, $313; in South Australia, $270; and in South-East Queensland, from the retailers—but the Queensland government's not contributing to this—$175.

As well as that we have introduced to the parliament today our big-stick legislation, and we've done it because there has been price gouging. We want to stop market manipulation. There have been dodgy practices, to use the words of one of the chief executives of the big energy companies. He described the practices that have occurred in the industry as 'dodgy'. We've seen these sorts of practices in the retail market, in the wholesale market and in the contract market, and this is an essential part of our package, our policies to reduce electricity prices. When did reducing electricity prices become not a policy? How can the Labor Party think that that is not central to any sensible policy? I'll tell you why. The Labor Environment Action Network told us why. They think that rising prices are an illustration of the market working well.

Those opposite are in favour of higher electricity prices. In fact, the last time they were in government they did exactly that: they drove higher electricity prices. We know that in addition to ensuring that vulnerable customers get a fair deal, ensuring that the big energy companies are held to account, we need to make sure that there is enough reliable, 24/7, supply in the system to keep prices down and to keep the lights on. We'll have a shortlist of projects in the new year—dispatchable, reliable, 24/7 power that can balance the record level of investment in solar and wind that's happening right now: $15 billion of investment. It needs to be balanced with capacity firming, with storage—with the sort of capacity that can deliver 24/7 power to make our aluminium smelters work properly, to make sure that our steel mills can work, to make sure that our abattoirs can work and to make sure that every Australian knows that when they flick the light switch the lights will go on.

In contrast, unfortunately, tragically, there was what we saw under a Labor government in South Australia. When South Australians flicked the switch, nothing happened. Yet they still, at the end of the quarter, were getting the highest electricity bills in the world. That was because of reckless policies from a Labor government that doesn't understand that you have to have 24/7, reliable power to keep prices down and keep the lights on. It is about balance; it's about balance across all fuel sources. On top of those initiatives I've already described, we're progressing reliability obligations through COAG. This means that, years ahead of time, the retailers will need to invest in that 24/7 power that is going to keep the lights on and is going to keep prices down. They will be held to account, and that's what this is all about. We need an industry that focuses on its customers and that focuses on a fair deal for all Australians, something that the Labor Party no longer understands at all.

The real question right now in this place is: which side will the Labor Party sit on? Will it sit on the side of those hardworking small businesses and families across Australia, or will it sit on the side of the big energy companies' executives? Whose side will it sit on? We sit on the side of those hardworking families and small businesses. Those opposite are very happy with the profits of the big three electricity companies rising from $1.4 billion in 2014-15 to $2.6 billion this year, and that doesn't even include the Queensland government ripping $2 billion out of the hands of its customers in the last year alone.

The bill that we have introduced to the parliament today will hold energy companies to account across each of the crucial markets for electricity. In the retail market, we know retailers deliberately confuse customers with their discounting strategy, often using what the ACCC has called excessively high benchmarks and complex offer structures. That needs to change. We need to see that, when wholesale prices go down, so too do retail prices. We need to make sure that, when retail prices are set, they are set in a fair way without a loyalty tax. The ACCC has described these practices and said:

Electricity retailers' discounting practices are a deliberate tactic to give the impression that an offer is significantly cheaper than other offers in the market when this is often not the case. This behaviour is confusing, at times misleading, and leads to poor consumer outcomes.

Retail prices need to follow wholesale prices. That's built into the legislation. In the wholesale market, a lack of competition has resulted in higher prices. The ACCC said:

… lack of competitive pressure is of concern to the ACCC, particularly given the critical need for a sufficient level of competition …

It said:

In each NEM region the current combined market shares of the three most significant generators is close to or in excess of 70 per cent on the capacity measure, and over 80 per cent on the dispatched energy measure.

That's with only three players, and those opposite are defending them.

Those opposite used to believe in competition policy. They have a competition lawyer on their front bench. Isn't she explaining to you that this is a problem? Hasn't she explained to you that asset divestiture is applied across the board, across the whole economy, in the US under the Sherman act and in the UK under their Enterprise Act? What we are doing is targeting. It's energy specific, it's time limited and it requires a court order. I'm sure your competition law adviser can explain to you that it is measured, it is proportionate and it is appropriate for a market where 80 per cent of the market is held by three players.

In the contract market, a lack of liquidity acts as a barrier to entry, where the dominant position of gentailers can make it harder or impossible to enter the market. In South Australia, if you are an independent retailer and if you're an independent generator, getting into the market is nigh on impossible. It is tied up. The ACCC puts it well when it says:

In certain regions of the NEM, particularly South Australia, the level of liquidity and the advantages enjoyed by vertically integrated retailers make it difficult for new entrants and smaller retailers to compete effectively in the retail market.

We are acting on this, because we stand on the side of those hardworking Australians who want a better deal with their electricity prices. We are dead against a 45 per cent emissions reduction target that those opposite support. They want higher electricity prices, because they want to make sure that Australians buy less electricity. They want to make sure that Australians don't get a fair deal. We are for a fair deal.

Mark Butler (Port Adelaide, Australian Labor Party, Shadow Minister for Climate Change and Energy) Share this | Link to this | Hansard source

What a shambles energy policy is under this government. We've been trying to keep count but we're pretty confident that we're now up to double digits in the number of energy policies this government has had since the last election in 2016. We had the emissions intensity scheme and the Clean Energy Target. We lost count of the number of versions of the National Energy Guarantee. My colleague the member for Charlton says there were four versions of the National Energy Guarantee in the final 14 days of Malcolm Turnbull's prime ministership before he was defenestrated—four in 14 days. This week we've had two energy policies. It's 20 to four on Wednesday, so I'm not ruling out the possibility that there will be a third, at least, this week if the coalition party room ever meets to consider this. But this current policy has to take the cake. This is a Venezuelan-style neo-Marxist state intervention into an energy market, which this Liberal Party privatised. The experiment in privatising an essential service was not driven by the Labor Party. We opposed it every step of the way. This experiment in privatisation is now apparently an evil to be confronted by this Venezuelan-style state intervention. My colleague the shadow Treasurer has talked about that quite a deal.

But, of course, there is a second element to the policy of this new minister, this novice minister, and that is to throw billions and billions of taxpayer funds at building new coal-fired power stations, for which no investor other than Clive Palmer in Australia has indicated the slightest interest in cooperating. The Australian Industry Group—not Greenpeace, not the Labor Party, not anyone else—has estimated that this minister's plan to indemnify a new coal-fired power station—just one coal-fired power station—against future carbon risk could cost taxpayers $17 billion. We know that those opposite have a plan to build significantly more than one coal-fired power station. We read in The Australian newspaper, from government sources, they were planning to build a new coal-fired power station in my electorate of Port Adelaide on the Lefevre Peninsula. So, times $17 billion by several new coal-fired power stations and you are starting to talk real money that the taxpayers are lumping up to satisfy the ideological obsessions of this government.

It's not just the absolutely shambolic process of policy development under this government over the last few years; the substance of this bill is even worse. We heard the Prime Minister quote, rather selectively, I might say, from a recent report from the ACCC, the consumer watchdog—the statutory body with responsibility for looking after the interests of consumers—after its two-year inquiry into the operation of the electricity market. He didn't quote this particular part, when the ACCC dealt with the possibility of a divestiture mechanism in the electricity industry. What the ACCC said, after lengthy and exhaustive consideration of this possibility, is:

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 National Electricity Market.

It was not something that the Prime Minister saw fit to quote in question time when he was selectively using the authority of the statutory consumer watchdog, the ACCC.

You would think, if the consumer watchdog, empowered by this parliament to look after the interests of electricity consumers, thought that divestiture would help them, would lower power prices, perhaps they would have included it in their 56 recommendations about what to do with this electricity market, and they didn't. Indeed, after the report was delivered and when this government first announced their so-called 'big stick', the ACCC chairman, Rod Sims, was giving evidence to a Senate estimates hearing and he confirmed:

I think I can confidently say Senator I found out about it when everybody else did, when I read about it—

the divestiture idea—

in the newspaper.

He confirmed in those hearings that he hadn't even been asked by the Prime Minister, the Treasurer, or the energy minister about the conclusions he came to in his report on the operation of the electricity inquiry. Such is the disdain this government has for good policymaking process, the idea of evidence based policy, informed by the views of experts like the ACCC or even by Ian Harper's earlier national competition policy review, which also considered and rejected the idea of divestiture. Other business groups—not the energy companies; of course, they oppose it—representing those that use energy oppose this because it is bad policy.

Steve Irons (Swan, Liberal Party, Assistant Minister to the Prime Minister) Share this | Link to this | Hansard source

Today's MPI is a clear example of just how out of touch the opposition really are when it comes to matters concerning everyday working Australians.

Mark Butler (Port Adelaide, Australian Labor Party, Shadow Minister for Climate Change and Energy) Share this | Link to this | Hansard source

You privatised the WA assets.

Steve Irons (Swan, Liberal Party, Assistant Minister to the Prime Minister) Share this | Link to this | Hansard source

I am glad you raise the WA stuff, because I'm about to give you some real facts. You talked about WA, the youngest Labor government in Australia, and how they treat electricity, cost of living and household pressures. Labor need to take a good long hard look at themselves and decide whether they sit on the side of the big energy company executives or the side of the customers, hardworking families and small businesses. The government is taking a proactive role in stopping the price-gouging by energy companies with our big stick legislation.

Ed Husic (Chifley, Australian Labor Party, Shadow Minister for the Digital Economy) Share this | Link to this | Hansard source

Yay!

Steve Irons (Swan, Liberal Party, Assistant Minister to the Prime Minister) Share this | Link to this | Hansard source

I hear the cheers of encouragement from the other side. Over 458,000 Australian families and 39,000 small businesses are getting a better deal on their energy prices thanks to the pressure from the Morrison government on the big energy companies. The energy companies have been responsible for some shady practices: price-gouging and loyalty taxes, to name a few. There is an urgent need for culture change in those companies and in that industry, and it requires strong legislation. Origin Energy, Alinta, AGL, Energy Australia, Next Business Energy, WindConnect and Powershop are lowering standing offers on 1 January 2019.

If we're up-front about the Australian energy market, we know that they haven't been serving their consumers well. The ACCC has pointed a finger at the energy companies, saying retailers have played a major role in poor outcomes for consumers, but the Labor Party has also played a role in poor outcomes for the consumers. As I said before, we heard the member for Port Adelaide yell out something about Western Australia, and this is a perfect example of how Labor do energy policies. You have to watch what they do, not what they say.

An article by Brendon O'Neill on 13 March 2017 says:

The Labor party staunchly opposed Colin Barnett's proposal to sell Western Power – the distribution network spanning most of the state outside the South West. While the Liberals, Nationals and ACCC advocated that privatising could reduce power bills as much as 51%, Labor warned the sale would lead to higher prices as well as lower maintenance and service standards since electricity distribution is not a competitive industry. With McGowan's convincing victory in the election, Western Power will remain in public hands.

That's not exactly true, because, whatever happened, another article, written by Paul Murray, 'Opinion: Labor and anti-privatisation McGowan Government are saying one thing and doing another', says:

Despite outrage at the idea of selling Western Power, it appears Labor has just sold part of Synergy.

After their faux outrage at selling Western Power, they've now sold off part of Synergy. They've all gone quiet. This is how Labor run their electricity and energy policy. They just put prices up. That's all they do. An article by Daniel Mercer in The West Australian,'WA households could be hit by 15% rise in electricity prices', says:

WA households could be hit with flat electricity price increases of more than 15 per cent over the next three years as the State Government shores up power provider Synergy's financial position.

Don't worry about the consumers; worry about the energy company! The article continues:

After consumers were stung with an 11 per cent increase in power bills this year, Energy Minister Ben Wyatt signalled the Government was aiming to repeat the dose in coming years.

Mr Wyatt told a Budget estimates hearing into Synergy that the forecast improvement in the power supplier's bottom line for this financial year was largely because of the decision to impose the price increase on "fixed" charges.

For residential customers, this is the supply charge and is separate from consumption charges.

You'll be gobsmacked: after they came into government, within a month this supply charge 'was increased to 98.9c a day from 48.6c last year—an increase of $169 a year' for every WA consumer.

Mr Gorman interjecting—

I see the member for Perth in here applauding the fact that consumers have to pay an extra $169 a year. The article continues:

A typical household power bill is $1722 a year, according to Treasury.

With assumed price increases in the State Budget of 7 per cent, 5.6 per cent and 3.5 per cent between 2018-19 and 2020-21, Mr Wyatt said "there is probably still more to come" …

So all WA consumers should just listen to Ben Wyatt: there are still more power price increases to come in Western Australia. This is what Labor do. Don't watch what they say; watch what they do.

Pat Conroy (Shortland, Australian Labor Party, Shadow Assistant Minister for Infrastructure) Share this | Link to this | Hansard source

Turkeys voting for Christmas!

Andrew Gee (Calare, National Party) Share this | Link to this | Hansard source

This MPI debate has made it very clear where we all stand in this House on this issue. On this side of the House, we stand for consumers—

Mr Buchholz interjecting—

Yes, we do. We stand for the consumers. On that side of the House, they stand with the big power companies on this issue. Everyone on this side of the House has been contacted by families who are doing it tough, struggling to make ends meet because of these skyrocketing power prices. They've had enough of it. We all know the stories of the pensioners who have contacted our offices and said: 'We are struggling to keep the heaters on in the wintertime, because we just can't cope with these sky-high power prices.' Something has to be done. The families, the pensioners and the businesspeople have been crying out for bold and decisive action—and this is what has been delivered with this new policy. All around us on this side of the chamber we've heard stories of the small businesses who have contacted our offices—for example, Appledale fruit processers in Orange. They are a community-run co-op, run by the processors, and their power bill has been going up by tens of thousands of dollars every year. They just can't keep going with these sky-high power prices.

Those on that side of the House think that small businesses, medium-sized businesses and even the bigger businesses are just going to keep on going forever and a day, producing the prosperity, wealth and opportunity that this country was built on. But it's not like that. We can't take them for granted. We can't just keep hammering them and hammering them with ever-increasing taxes and ever-increasing prices, which those on that side of the House advocate for through their opposition to this policy. If we want regional economies to grow, and if we want regional communities to prosper, then we need to be doing something about these power prices—because sky-high power prices are a regional jobs killer. I've been to enterprises in our part of the world where they've told me that they won't be able to continue. There's a commercial laundry in Blayney that I visited. They employ 25 people in a small country town. They rang the alarm bells early and said something needs to be done about these skyrocketing power prices and gas prices. If that business closes, 25 people in a small country town lose their jobs. It's not easy—

Luke Hartsuyker (Cowper, National Party) Share this | Link to this | Hansard source

And they don't care.

Andrew Gee (Calare, National Party) Share this | Link to this | Hansard source

They don't care on that side of the House, as the member next to me attests to. They just don't care—because they are standing with the big end of town and the big power companies, who have been price-gouging consumers for far too long. Everyone out there knows what's been happening. Everyone out there in the real Australia knows that this has been going on—because they've been copping the bills. This whole power argument which the coalition are seeking to prosecute is just a continuation of the Canberra bubble and a continuation of this introspective, political-class debate that is going on on the opposition benches. What is wrong with the principle that, if power companies get a discount on their wholesale price for electricity, that should be passed on to consumers? What is so terribly wrong about that? What is so hard to grasp about a concept like that? We stand with the consumers. If the power companies are getting discounts and price reductions on the wholesale price of electricity, that should be passed on to consumers. It's a very simple thing.

Government members interjecting—

That's exactly right, as my colleagues here point out: that's what this legislation does. We are standing up for those most vulnerable people in our communities, unlike those opposite, who are not only seeking to impose higher power prices on people in our communities like pensioners but also have that great new retiree tax which they're seeking to slug retirees with! It's a double whammy. In the electorate of Calare, there are 6,500 retirees who are affected by Labor's retiree tax. You've got to explain yourselves, through your candidates, to these electorates as to why you are doing that to the most vulnerable people in our society, in our communities around Australia. You're hitting them with a retiree tax and you are hitting them with higher power prices. It is not sustainable.

That's why the government has brought in this legislation. If you're not going to play by the rules, if you're going to engage in anticompetitive conduct, then why shouldn't you run the risk of being broken up if you're a price-gouging power company? We are standing with consumers on this, and we will do it proudly and we will do it right through to the next election. We will fight for consumers. (Time expired)

Lisa Chesters (Bendigo, Australian Labor Party, Shadow Assistant Minister for Workplace Relations) Share this | Link to this | Hansard source

Sitting here through this MPI, I'm no clearer as to why the Liberals and the Nationals are being so ridiculous when it comes to energy policy. They talk about consumers as though consumers are not voters. They're the same people. Over and over again, the voters throughout Australia have tried to teach them a lesson about where they stand on the privatisation of their energy assets. The member for Rankin mentioned what happened in Queensland. Do I have to remind those opposite again that there was a massive victory to Labor when they tried to privatise the energy network under Campbell Newman? Do we have to remind them about what happened in WA? There was a similar result in the election. What happened way back when Jeff Kennett was the Premier of Victoria and he privatised the industry there? There was a victory to Labor, and Labor has been in government ever since. In my part of the world in Victoria, Jacinta Allan has been the state member since 1999 and she's now, on primaries, winning that seat.

It all goes back to the fact that what this mob opposite cannot get out of their system is how addicted they are to privatising public assets. On this new position, this clause they've put forward, in all their contributions they've sidestepped and not really addressed the fact that what they're trying to do is force states to privatise their assets. It's a new low and a level of ridiculousness by the government to suggest that they're going to start dictating to states like Queensland and Tasmania, where, again, the voters recently reminded them what they think of their ideas and their tough approach towards these states.

But it's not just the states that are up in arms about what the government are putting forward in terms of this policy. The government have also managed to upset the business community—their natural constituency. Jennifer Westacott has come out and said:

The principle that governments can misuse their power to break up companies sets a dangerous precedent that will deter investment across the economy.

This will do nothing to solve high power prices for families and businesses struggling to pay their bills today.

When you've got your own criticising you, you'd think you'd take a step back. But, no, they haven't. It doesn't stop there. You've got the Australian Industry Group having a go. You've got the energy companies themselves having a go. You've got small businesses and families having a go. The fact is that energy prices are higher today than they've ever been before because of this government and its failure. It has been in government now for five years and it has failed. When you go to any manufacturer in regional Australia, they tell you that they are price-takers. They've got a lack of ability to negotiate contracts. Some of them are stuck on month-to-month contracts with their energy companies because this government has failed. Its inability to set long-term policy, the chops and changes it has had, has caused this problem.

They stand here now with another new policy, one that is so radical that it will actually cause real damage in states like Queensland. If they force the state of Queensland to sell their assets, they can't even tell us which other state enterprise they can sell their assets to. Do they set up Energy Queensland 2? Do they sell it to another state? Do they sell it to the federal government? This policy is so poorly designed and so done to try and appease people on their own backbench that they can't answer the most basic of questions. It should be withdrawn. It should be withdrawn, and the government should take seriously what Labor has put forward.

They've tried to criticise the policy that Labor's put forward, which would help consumers with battery storage. How could you do that? It is not only a popular policy; it makes sense to households. They've got solar panels on the roof; we're going to help them with the next step of putting batteries in their homes to store energy. We know that this kind of technology is already changing what is happening in a lot of our agricultural industries. Where farmers have the ability to have onsite storage, they are able to lower their energy bills. When they have the ability to go off grid, their farming enterprises are turning around, and good on them for doing that. Good on them for going off grid and being able to power themselves.

People want to be more engaged in power. They want to see a power-sharing grid. What they don't want is the way this government is treating energy policy, particularly by turning around to the states and saying, 'Do it our way or divest.' (Time expired)

Keith Pitt (Hinkler, National Party) Share this | Link to this | Hansard source

Firstly, can I go to the contribution for the member for Rankin. The member for Rankin is clearly a little bit under the weather, so we'll give him leeway. I hope you feel better soon, Jim. I say to the member for Rankin: he knows a good scare campaign when he sees one. There was a very clear media statement today from the Treasurer and the Minister for Energy saying very clearly that if the divestiture powers are used in an area like Queensland, where the Queensland government owns everything—70 per cent of the generators and all of the poles and wires; there is only one retailer in regional Queensland, and it is owned by the Queensland Labor government—they can split into other government owned corporations. As someone who has lived in Queensland for the overwhelming majority of my life, I can say that was exactly how it was. The Far North Queensland Electricity Board, the Wide Bay-Burnett Electricity Board and all of the other boards were separate. They had their own maintenance crews, they did their own billing and they competed with one another for work. And what did the Queensland Labor government do? They put them altogether and they centralised all of their services, to the detriment of our people. We are here for consumers. We are not here for governments, and we are not here for big business.

Let's look at why this legislation is necessary. The answer to that is very, very simple. Energy companies, particularly the big gentailers and people like the Queensland Labor government, are robbing billions of dollars from consumers for one reason: because they can. They are profiting from the pockets of people who cannot afford to pay, and they are predominantly our people. On this side of the House we are standing with consumers. The divestiture laws, if activated, are good legislation. They are strong decisions that send a very clear message to those people who are robbing consumers right across the country.

Now let's look at who recommended it. This is not something that fell out of the sky. This is the ACCC. The ACCC made recommendations around divestiture. They made recommendations about ensuring that we get continuity and reliability of supply. The Minister for Energy, Angus Taylor, is working on that right now. For those on the other side who want a 50 per cent renewable target, here is your opportunity. Get in and tender with everybody else. Compete with everyone else that will put forward generation capacity for this country and, if you are cheaper and if you can meet reliability standards, I'm pretty confident you'll get a go. You will be able to get out there and deliver what you want.

That big science experiment in South Australia under the previous Labor government for 50 per cent renewables resulted in two things: first, the most expensive electricity in the world; and, second, an incredibly unreliable system that relies on the electricity cord to Victoria. I'm happy to compare my resume with anyone on that side of the House, if we want to talk about power systems and energy—no problems at all. There are some very complicated technical issues around the design of our network and how it works. That includes systems security and stability, without which the lights will go off. So it is not just an ideological debate. This is an incredibly technical area that we need to get right.

Right now, the Queensland Premier and the Queensland Labor government have hooked some $2.2 billion from Queensland consumers. They made them borrow $5 billion to try to prop up their budget a couple of years ago, because they are simply terrible economic managers. On this side of the House we will implement the tough laws that are necessary, because they are necessary. If we look at the big three, they have had an increase in profits of over a billion dollars in the last three to four years. Every single business I know would like to have that sort of increase in their profit margin.

I say again: they are doing this because they can. They are profiting from people who cannot afford to pay. What will be the result? If those opposite are successful in the next election and they implement their power policies, I can tell you right now what will happen: we will lose the aluminium industry. We will lose the last remaining foundries in this country. We will lose those businesses that are very highly dependent on the cost of energy, and they are usually people who would support those opposite. That is where they garner their members. They are members of the ETU. They are members of the AWU and the metal workers union. People on the opposite side of the House are not supporting those who would typically support them. They cannot be trusted with the national economy and definitely not with energy.

Pat Conroy (Shortland, Australian Labor Party, Shadow Assistant Minister for Infrastructure) Share this | Link to this | Hansard source

I admire the member for Hinkler's passion and I admire his commitment to operating in a fact-free zone, which the last five minutes demonstrated. I'll begin where he finished, which was with the cost of power and what the cheapest form of new generation in this country is. If I'm given a choice between relying on the rantings of the member for New England or on the Australian Energy Market Operator, I'll rely on the Australian Energy Market Operator, who has stated unequivocally that the cheapest and most reliable form of new power in this country is renewable energy backed up by pumped storage and gas. Don't take my word for it; don't take the word of environmental groups for it; take the word of the Australian Energy Market Operator, who said that renewable energy, firmed up with pumped hydro, is the cheapest replacement for the eight coal-fired power stations we're going to see retire in the next 15 to 20 years. That's the fundamental issue.

We've got a lot of coal-fired power stations that have done great service to the nation and are retiring. They must retire; they are falling apart as we speak. If you want cheap power, reliable power and cleaner power, renewable energy is the answer. That's what the Australian Energy Market Operator has stated unequivocally, and that's why Labor has called for the NEG, and it's why Labor has agreed with the vast majority of stakeholders who've said the NEG is the answer. So, while the member for Hinkler and the coalition stand with Alan Jones and the tinfoil-hat-wearing brigade over there who refute climate change, we stand with the Energy Council and AIG. We stand, ironically, with ACCI, BCA, BlueScope, the Energy Users Association, APPEA, the Clean Energy Council, Energy Networks Australia, the Smart Energy Council, Solar Citizens, the ACTU, the former Prime Minister Mr Turnbull and the current member for Curtin. They've said that the NEG is the right energy policy.

For all the crocodile tears over there about protecting consumers, the great tragedy is that they have been the architects of skyrocketing electricity prices because they haven't had stable climate and energy policy over the last 5½ years. In fact, in a 14-day period in August, would you believe, Mr Deputy Speaker, that the government had four different energy policies? Not in five years, not in three years, not in three months but in 14 days they had four different energy policies.

Andrew Giles (Scullin, Australian Labor Party, Shadow Assistant Minister for Schools) Share this | Link to this | Hansard source

Pretty agile.

Pat Conroy (Shortland, Australian Labor Party, Shadow Assistant Minister for Infrastructure) Share this | Link to this | Hansard source

It's very agile, as the member for Scullin comments. Who paid the price for this policy agility? It was households and businesses, because, in the two months after they junked the NEG, when the climate change deniers had their little revolt over former Prime Minister Turnbull, wholesale energy prices rose by 122 per cent and future prices rose by 20 per cent because they junked the NEG, opened up another abyss and came up with this incredibly stupid divestiture policy. It is a policy that will increase energy prices, a policy that will increase policy uncertainty, a policy that will hurt households, businesses, workers and the entire nation, and they can't even get that right, because they faced a little minirevolt from the member for Curtin, and that led to headlines today like 'PM retreats on energy "big stick"'. We had another one that said 'Libs' abject surrender'. Even when they come up with an incredibly stupid and short-sighted policy, they can't stick to it for more than a month or two at a time. So the big stick, as has been commented upon, is now a little toothpick, but it's a little toothpick that has dire consequences for the energy sector. We heard today, for example, that the way it has been clumsily constructed could lead to forced privatisation in Queensland and potentially in Western Australia as well.

If those opposite want to fight an election on forcing the states to privatise their power companies, I'm very happy to fight that. Ultimately, we'll stand on the side of the consumers and say no to more privatisation and no to more power price increases, which their policies have driven. Unfortunately, I don't expect it actually to be taken to the election. We have another five or six months before that, so I'm expecting at least four or five energy policies from the government before we get to 18 May. We will see what comes out of this. The member for Grey is up next, and he will come up with the novel scare campaign about South Australia and everything else. For once, I urge them to actually listen to the experts rather than the naysayers on climate change.

Rowan Ramsey (Grey, Liberal Party) Share this | Link to this | Hansard source

When it comes to South Australian electricity supplies, I think I am more probably more expert than the member for Shortland, having lived through the procedure, having dealt with Alinta through that closure period and having met with the AEMO in 2012 to express my concerns about what the removal of Alinta's Northern Power Station would mean to South Australia. It doesn't give me any great thrill to say I told you so, but I did tell this House, on a number of occasions, exactly what I thought would happen. I have proven to be remarkably perceptive in that area, I must say.

This MPI this afternoon targets irresponsible divestiture policies. I might point out that it is a little puzzling that the two biggest economies by GDP in the world are the US and the EU, which both utilise divestiture policies. It does not seem to be holding them back all that tremendously badly. They are rarely used, and why is that? It's because, when companies and investors understand what the rules are, they fashion themselves in advance to set up their business arrangements so that they don't saturate any particular market.

It was Paul Keating who knew this. Paul Keating knew about it well. In 1990, he actually instigated the current policy of the four pillars of Australian banking, which is still standing. It was to stop one of the other banks taking over and reducing the four pillars to three pillars, if you like, and then the three pillars to two pillars. Keating knew that you had to have a level of competition to achieve the best result. Notwithstanding the current banking inquiry and things that may not be as they should be in that area, Keating certainly understood the issue of competition.

The thing is that if you want competition then the undeniable fact is that you need competitors. In the case where you have two or three power suppliers, it's almost impossible for a new player to get a start in the market. Government policies are very focused on enabling new players to get into the market across a range of issues, including being prepared to underwrite new investment in this area to smaller players. These small players should not be frozen out and intimidated by monopolies, duopolies or even triopolies. They need the chance to establish their business.

To go back to the South Australian issue: I was involved on a regular basis with Alinta. It must be understood that the proliferation of renewable energy in South Australia actually undermined the business case for a base-load generator. Basically, we had a power station that used to be able to sell electricity for a profit for 365 days a year and then 300, then 200, then 100 and then less than 100. It was to the point where it couldn't sell electricity on a profit for enough days for it to survive. They went begging to the South Australian government and to Jay Weatherill for a lifeline. They said, 'We could keep this power station open for another three or four years,' when in fact it had a projected 15-year life, for an $8 million a year consideration. Premier Weatherill rejected that.

That decision alone will cost South Australia billions of dollars over the period of the decade from that power station's closure. It's because of that that our electricity is the most expensive in the world. It's what happens when you get blanket policy—blunt policy, if you like—applying across the whole nation. The South Australian government chased investment in renewable energy down relentlessly and led to this situation where the unreliable energy, if you like, chased the reliable supplier out of the market. On that day when Alinta as a generator departed from South Australia, we were left with two—maybe two and a bit—major suppliers of electricity. That is just not a comfortable marketplace. It is not a way to generate competition.

The government was faced with this situation and it had to act. What would the opposition have us do? Sit and do nothing, allowing consumers in the market to be gouged and not be properly serviced? Not allow another competitor to come in on an even basis?

Kevin Hogan (Page, National Party) Share this | Link to this | Hansard source

The time for the discussion has concluded.