Tuesday, 22 October 2019
Treasury Laws Amendment (Prohibiting Energy Market Misconduct) Bill 2019; Second Reading
I rise to speak on the Treasury Laws Amendment (Prohibiting Energy Market Misconduct) Bill of this year. This is legislation that has been around this parliament or, more to the point, the previous parliament for some time. And, as I think the Shadow Treasurer has indicated, subject to support by the government for a number of amendments which I will address in the course of my remarks, the opposition will in a constructive way be supporting this legislation.
This is, I need to stress, not legislation that we would be necessarily bringing forward, were we on the Treasury benches. We instead would be focused on developing a coherent national energy policy of the type that has been recommended by so many different advisory bodies, whether they are government electricity agencies established under the National Electricity Market, think tanks like the Grattan Institute or any of the myriad bodies that consider this matter.
It's quite clear that what the energy market, particularly the electricity market, needs is a coherent national energy policy, and I will talk about that a little later in my remarks. It is also important to note that this legislation, or any variant of it, has not been recommended by the consumer watchdog. It is apparently a piece of legislation designed to improve the circumstances of consumers in the electricity market. Not only was it not recommended by the ACCC after its lengthy examination of the retail electricity market but, indeed, it recommended against a divesture power, as did Professor Ian Harper in his review of competition policy for the government a couple of years earlier.
As any observer of this debate would know, various business groups, energy users and energy suppliers over the last 12 or 18 months have been critical of the legislation in its different iterations. But since the election in May, the business groups, most notably the Business Council, have changed their views from one of opposition to one of instead seeking to work with the government to improve the operation of this bill, and that too, in the spirit of being a constructive opposition, has been the approach of the Labor Party. Most notably, after considerable debate about the impact of potential ministerial overreach in the operation of the original bill, it is pleasing to see that government has curbed or pulled back the ministerial power that would be able to be exercised under this legislation and instead has properly substituted a role for the ACCC—the body set up under legislation of the Commonwealth parliament to protect the interests of consumers—and also a very important role for the Federal Court. We take that as a significant improvement to the bill given that, since its original presentation, we had been complaining of overreach on the part of ministers.
There are, though, a series of outstanding measures that I am sure the shadow Treasurer will refer to that I want to talk to in some detail that are the subject of amendments that I'll be moving in the third reading debate. The first is that we have complained since the original presentation of this bill that it contained a very significant loophole to allow the privatisation of publicly owned electricity assets—namely, the forcible divesture of publicly owned electricity assets and the transfer of those assets to private companies. We know the Liberal Party is addicted to the privatisation of electricity. I come from the state of South Australia where all of the electricity assets were privatised by the Olsen government, by the Treasurer, Rob Lucas, who, again, is the Treasurer of South Australia, and is now undertaking at privatisation exercise of our rail services. In Victoria too and in other jurisdictions, we saw over the course of the 1990s and 2000s wholesale privatisation by state Liberal governments of our electricity assets. We were promised there would be more choice and there would be better prices and competition in the market, but I think anyone who has had even a casual look at the operation of the electricity market knows the privatisations have worked for companies but they haven't worked for consumers.
The member for Kennedy and Labor identified this loophole in the original presentation of the bill. The government went some way to closing the loophole but it is clear that, in the form in which the minister has presented this bill, there is still the capability of a divesture order to downgrade the level of public ownership of an existing electricity asset in those states like Queensland, Western Australia and Tasmania where, time and time again, the community, through state election campaigns, has voiced its view that it wants its electricity assets kept in public hands. So I will be moving an amendment to ensure that that loophole is closed absolutely and completely, to ensure that, if the operation of this legislation results in the divesture of a publicly owned asset, it can only be divested to another publicly owned asset with the same or greater level of public ownership.
We are also obviously, as a Labor Party, very concerned that workers and their entitlements not be prejudiced by the operation of this legislation. Workers, after all, have no responsibility for the conduct that is apparently the driver of this legislation being put in place, no responsibility for allegations of cartel conduct or reductions of competition in the market. It is, I'm sure, no surprise to anyone that this government has apparently paid no attention at all to the possibility that workers' entitlements will be reduced by the operation of this legislation. It's simply not a matter that is typically on the radar of this government. Our advice is that the transmission of business provisions contained in the Fair Work Act do not cover a transmission that is caused by a forcible divestiture of the type contemplated by this legislation. So I will be moving an amendment in the third reading to ensure that the transmission of business provisions of the Fair Work Act are deemed to apply to this type of transmission—namely, a forcible divestiture. That will ensure that those entitlements that are contained in registered enterprise agreements and in awards are preserved and protected for workers, who are, as I said, not the subject of the so-called mischief that lies at the heart of this legislation.
I also foreshadow that there is a further concern—that is, that entitlements that are not contained in registered agreements or awards but have still been properly negotiated between trade unions and employers are not also protected by this legislation. It is utterly important that many of those important safeguards, many of those hard-fought entitlements, whether they be around redundancy, portability of employment or what have you, also be safeguarded under the operation of this legislation. So I foreshadow very clearly—and we have communicated to the government very clearly—that we intend to explore this issue in detail in a Senate inquiry and to also consider amendments that would sit alongside the amendment I'm already moving around the operation of the Fair Work Act transmission of business provisions to make sure that worker entitlements contained in unregistered agreements are similarly protected. We expect that the government will support that amendment, because, after all, it is not the workforce that is the target of this legislation; it is the companies themselves.
Finally, these are extraordinary powers. They've been described as such by the ACCC and many other observers. Forcible divestiture is not a power that's typically been enshrined in legislation, let alone used in Australia. If this parliament is to adopt this power in the energy market, it should be the subject of an independent review after a period, before the sunset clause kicks in, to assess whether the operation of the legislation matches the rhetoric of this government. And I'll be moving an amendment in the third reading on that as well.
I would hope that all of those amendments, particularly the amendments that close the loophole on privatisation and protect worker entitlements, will be supported by the government. We've already indicated to the government that, if those amendments are supported in this House, we will support the passage of the bill, but, if those amendments are not supported by the government, we will be voting against the bill. We're very confident that our amendments improve the bill markedly, adding to the improvements that we, along with other stakeholders, were able to force the government to make to the bill before it was originally presented during the last parliament.
I want to be clear that this bill, in no way, is a substitute for a proper, coherent national energy policy. As the second reading amendment moved already by the shadow Treasurer very clearly points out, this is not an academic point. Australia finds itself in the throes of the deepest energy crisis since the mid-1970s, and, unlike the energy crisis of the mid-1970s, which was caused by an external shock—the oil crisis—this energy crisis is the product of profound public policy failure. Households and energy-using businesses are paying the price for this crisis. Wholesale prices are up across the National Electricity Market, on average, by 158 per cent since the crisis really took grip in 2015. Power bills for households and businesses are going up and up, and it's quite clear that the market expects those bills to continue to go up. The Financial Review only reported very recently that forward prices in the electricity market are up 29 per cent in just the 12 months since the former Prime Minister, Malcolm Turnbull, and the National Energy Guarantee were both dispatched in a coalition party room ambush. The Minister for Energy and Emissions Reduction pretends that prices are going down. He quite misleadingly points to the operation of the default market offer, which was a recommendation from the ACCC, as well. Labor was the first party in this parliament to indicate its support for a default market offer, which would operate to the benefit of the small minority of consumers, estimated at substantially less than 10 per cent, who have been languishing on standing offers for far too long. They have seen a price reduction in their bills as a result of the operation of the default market offer. But the minister needs to be up-front and honest. He needs to be straight with the Australian people that that constitutes substantially less than 10 per cent of the market, and they have been paying far too much for far too long. More than 90 per cent of consumers and the vast bulk of energy businesses continue to see their bills going up and up and up, wrecking household budgets and jeopardising the viability of many, many high-energy-using businesses, in particular. And it is exacerbated, of course, by the complete mess we have seen in the gas market.
The key problem, as identified by advice after advice, is the lack of a coherent national energy policy. The Australian Financial Review National Energy Summit, a very substantial annual occasion in the energy sector, held only the week before last, saw body after body present their key, clear view that until we have a national energy policy that makes sense in this country, this crisis is going to get worse before it gets better. The Grattan Institute, reflecting on what's happened to wholesale prices under this energy crisis, confirmed that it has resulted in $1 billion in additional windfall profits to just the big three private energy companies—an additional $1 billion in additional profits every year since this crisis took hold, paid for by Australian households and energy-using businesses. We know that there were more than a dozen—16 at our last count—attempts to land a national energy policy during the last parliament, none of which succeeded. The closest was the National Energy Guarantee. The member for Hughes is here; he wasn't a particular fan of the National Energy Guarantee, but neither was the now Minister for Energy and Emissions Reduction. It promised—according to the now Prime Minister, when he was the Treasurer, and the now Treasurer, when he was the energy minister—a reduction in household bills of about $550 on average. Instead, what we have seen since that coalition party room ambush is power bills go up and up and up.
The Prime Minister is also seeking to convince the Australian people that all things are hunky-dory in the investment market. Yes, we had a burst of investment in renewable energy to discharge the renewable energy target that the Labor Party had put in place when we were in government. Those opposite have tried to tear it down, time and time again, particularly the now Minister for Energy and Emissions Reduction, who came into this parliament surfing a campaign of being anti renewable energy. But what the Prime Minister doesn't tell the Australian people is that Bloomberg, the organisation he enlists in his claim that we were leading the world in renewable energy investment, has also reported that renewable energy investment is already down 50 per cent in the first half of 2019 alone. The Clean Energy Council says that is probably a low-ball estimate. We expect thousands and thousands of jobs to be lost from this sector, which should be growing.
We do support this bill, provided the amendments that I'll be moving in the third reading part of the debate are supported by the government. But we will continue to hold this government to account for its hopeless management of energy policy.
It is very pleasing to hear the member for Hindmarsh actually expressing his concern for the high cost of electricity prices. I would think that is the first time in the eight-odd years that I have been here that I've actually heard him express concern about the cost of electricity. Normally he was there backing his mates in South Australia, his state Labor colleagues in South Australia, who were kicked out of office a few short years ago. He should have been talking to them about the price of electricity. Or perhaps he should have been concerned about when he was part of the Labor Party government that brought in a carbon tax, which affected the wholesale price of electricity. Let's just go through what has happened to the wholesale spot price of electricity in this nation.
Back in those heady days before the carbon tax, the wholesale price of electricity was $30 a megawatt in New South Wales, $30 a megawatt in South Australia, $29 a megawatt in Queensland and $27 a megawatt hour in Victoria. We then had the Labor Party introduce the carbon tax, which put 50 per cent-plus on the wholesale price of electricity. Where was Labor's concern then that we hear at the dispatch box now about the cost of electricity? There was absolute silence from them. We were told how wonderful it was. They were more concerned with implementing that tax than they were about the cost and effect it would have on Australian business and on Australian households. Thankfully, the coalition removed that dreaded carbon tax, and the wholesale price of electricity fell. In fact, in Victoria, it fell back to $35 and in South Australia it fell back to $40.
We then saw, with the Labor Party cheering, the northern coal-fired power stations in South Australia taken offline and blown up because of Labor's reckless Renewable Energy Target in South Australia. It was exactly the same Renewable Energy Target that the Labor Party took to the election last year. And what has happened to the wholesale price of electricity in South Australia since 2015? Well, according to the data from the Australian Energy Market Operator, it has gone from $40 to the current year on average of $110. In five short years, it has gone from $44 to $110 a megawatt hour after they blew up the coal-fired power station.
What happened in Victoria after they decided—another brilliant Labor plan—to chase Hazelwood out of town, to triple the coal royalties and to drive them out? What happened to the wholesale price of electricity in Victoria? In 2015, it was $30 a megawatt hour. This year it is running at $110 a megawatt hour, not double but more than triple. Almost four times has the wholesale price of electricity increased in Victoria. So we have learnt our lessons as a nation: this is what happens when you blow up your coal-fired power stations.
We have in New South Wales a coal-fired power station, Liddell, that AGL say they want to close down and the amazing thing is they have been offered half a billion dollars for it. They have been offered $500 million for that coal-fired power station. Investors say, 'It is old. It is run down. We want to come in and refurbish it and keep it running to supply electricity into the Australian grid.' AGL have said, 'No, we don't want that half a billion dollars,' because it is worth more to them closed down than it is in the hands of a competitor. That is withdrawal of supply. That is anti-competitive conduct and it should be prohibited under our nation's competition law.
I have argued long and hard with the chairman of the ACCC, Rod Sims. I said to him, 'I believe that you have an arguable case under our existing competition law to at least do some jawboning to AGL and say that is anti-competitive conduct and you will use the provision of our competition laws against it.' But he is of the opinion that our existing competition laws are not strong enough. Therefore, that is why this legislation is so important. We cannot stand back and watch a company with a very substantial degree of market power in an industry that supplies an essential service like electricity engage in anti-competitive conduct by closing down a coal-fired power station when there is an offer for half a billion dollars on the table. And that is why divesture laws for the first time in this nation's history are highly appropriate. Just quickly, I know there have been some rumblings on our side of the parliament on this; however, a divestiture provision has been in America's anti-trust laws for over 120 years. The home of free-market capitalism has had divesture powers, not just in the energy sector but across the entire economy, for 120 years.
There are a couple of important points that need to be made. Divestiture is not government control or government takeover; it is simply a demerger—forcing a company with excessive market power acting in an anti-competitive way to break themselves up into several competing entities so they compete head-on with each other. If one company owned the Liddell coal-fired power station they would not close it down and knock back an offer for $500 million. It only makes sense because they can recoup that loss with higher wholesale prices in the market, like what we have seen happen in South Australia and Victoria. That is what this legislation is about.
I will provide a lesson from history. Over 100 years ago, the Standard Oil Company was broken up and ordered to divest by the US Federal Court. They were forced to divest into 34 separate companies. As a shareholder, for every share that you had in Standard Oil, you were given one share each in 34 new companies—and very quickly the sum of the parts was greater than the whole. So history tells us that shareholders do not lose when there is a divestiture order in place.
I will leave my comments there. I know that many of my colleagues want to speak on this important legislation, and we want to get it passed through this House post haste. I thank the House.
I rise to speak on the Treasury Laws Amendment (Prohibiting Energy Market Misconduct) Bill 2019. The Abbott-Turnbull-Morrison governments have been in office for 6½ years and, for 6½ years, the country has not had a national energy policy. We heard the member far Hughes rail against the previous policies that were put in place by the Labor government. But then the Liberal-National coalition got elected and, for six years, they have had no policy. That has meant that there has been uncertainty in assets that are predominantly owned by the private sector throughout this country. That uncertainty has meant that they haven't invested in new generation capacity, particularly in certain markets throughout the country. That's led, of course, to a reduction in supply and energy prices have been pushed up.
For six years, the government have dilly-dallied and done nothing—and this bill is their answer to those six years of inaction. This rather childishly named bill will not end the energy market crisis in Australia. It won't reduce electricity prices, because it doesn't encourage bringing on additional supply. It doesn't encourage fixing up the problems with the national electricity market, the problems with transmission and the problems with the distribution market—taking into consideration the fact that many Australians are now going on their own and investing in their own renewable energy with rooftop solar, batteries and the like. It certainly won't reduce carbon emissions. We all know that, under this government, carbon emissions have been increasing again—a problem that will ensure that our kids will have to pay for the damage that's done by this government's inaction on that issue. It won't boost investment in cleaner renewable energy. It won't modernise our electricity market and the rules associated with the generation, transmission and sale of electricity in Australia. It won't even end the war on climate change that's been going on in the coalition for well over a decade now, which has seen 16 different policies on energy in this country, brought by this government to the party room or this parliament, knocked off by the likes of the member for Hughes. When they finally got an energy policy up, in the National Energy Guarantee, they didn't knock off the policy; they knocked off the Prime Minister. They got rid of Malcolm Turnbull, because they didn't like what he was doing with the National Energy Guarantee.
All the while, Australians have paid the price. They have paid the price with skyrocketing electricity prices, and businesses have paid the price with skyrocketing gas prices, and carbon emissions in this country have begun increasing again. That is rather shallow and rather sad. It is sad because we've had a decade of stalled action on climate change in this country, because of the likes of the member for Hughes and a handful of people who don't believe in climate change and have held this government, the Australian people and progress on this issue in our country to ransom.
This piece of legislation is a fig leaf. It's a rather shallow piece of legislation that has come about because they can't mention carbon emissions in any piece of legislation or work that's done on that side of the parliament. If they mention the words 'carbon emissions', then the likes of the member for Hughes and others in this parliament who don't believe in climate change get their backs up and say, 'You're talking about a carbon tax.' Consequently, anything that's even looked like proposing reductions in emissions in Australia as an energy policy has been knocked off by those opposite. That's sad for the country, because it has stalled action on climate change over the last decade.
It's also, more importantly, sad for our children, because they are the ones who will pay the price for this government's inaction on climate change. They are the ones who will have to clean up the mess in future generations, and the cost will be much greater. That's why a million people marched in the streets of Australia a month ago and why students went on strike from school. Even a 16-year-old child understands that climate change is real and that, unless we reduce emissions in this country and take real action on climate change, they are the ones who are going to pay the price for it. As many of the posters that were displayed at the marches said, 'There is no planet B.' There is no other option when it comes to climate change; we either deal with it now or pay the price in the future. This notion of what the government call the 'big stick' legislation—that's what it's come to; a big stick. That's what they go around saying: 'We are going to wield a big stick with the energy companies.' How infantile! How childish this government have become if that is their answer to energy policy in this country, to tackling climate change and reducing emissions.
This is the second iteration of this bill. The government tried to introduce this divestiture legislation in the last parliament. It didn't come from a report. It certainly didn't come from the business community. The ACCC didn't support it when it was originally introduced, and the Labor Party opposed it as well as many of the crossbenchers. Consequently, they weren't going to get it through the parliament. So they backed off and dropped the legislation before the last election. They have come back with this piece of legislation. Thankfully, they have listened to some of the criticisms that were levelled by industry, the Labor Party and others, and they have changed this bill.
The original bill proposed that unless energy producers, wholesale suppliers of electricity, met a base market price for the sale of electricity, the government could come in and divest them of those assets. We heard the member for Hughes talk about divesture of a particular power station in New South Wales. What sort of message does that send to international investors and people looking to invest in new energy assets and new energy generation throughout the country—that, if you don't meet a certain price, the government's just going to come in and take those assets? What group of shareholders is going to agree to invest in a scheme like that? That is what this government—believe it or not, a Liberal government that supposedly believes in free markets—was proposing as its answer to the energy crisis in Australia. That was it—nothing more. That was it: 'We'll just come in and take your assets.'
The government has dealt with some of the reservations by introducing a different bill into the parliament which makes improvements, particularly in relation to privatisation, and Labor will fight for important improvements to the government's big stick to protect workers and rule out any possibility of partial privatisation. But we remain sceptical that this bill will reduce power prices—in fact, I'm certain it won't. That's why we've also proposed to review this bill before it sunsets. It has a sunset provision, and we believe it should be reviewed by an independent body to see whether it actually worked—whether it actually did anything in reducing power prices. The government has presented no evidence, no analysis and no modelling to support this claim that this will work. But we all know that power prices have skyrocketed under this government because they can't get their act together to develop an energy policy after six years. It's shameful. Labor has said that we will support this bill, conditional upon the government supporting our improved amendments that I mentioned earlier in respect of privatisation. Those outstanding issues will be examined as part of a Senate inquiry.
Since 2015, under this government, gas prices have tripled and wholesale power prices across the national energy market have increased by 158 per cent, smashing household budgets and jeopardising tens of thousands of manufacturing jobs. The lack of a policy on this issue, on energy, has been cited by the Finkel review, by the Australian Energy Market Operator, by the Energy Security Board and by industry and infrastructure Australia as the reason why we've had costs going up. Just recently we heard from the former Prime Minister himself, Malcolm Turnbull. He stated that the energy crisis would continue under the Morrison government. You can't get a better arbiter or more informed opinion on this than the former Prime Minister, because he knows the damage that people like the member for Hughes, who just spoke before me, have done when it comes to this debate in this country. The Liberals are simply incapable of delivering a policy that takes account of carbon emissions. That's the view of former Prime Minister Malcolm Turnbull.
If they were serious about ending the energy crisis, the government would bring back to this parliament the National Energy Guarantee. Remember that, the NEG? That was the one that the former Prime Minister and the Treasurer supported at some stage. They said it would bring down power prices by an average of $550, according to the government's own modelling. But instead, what do we get? We get the big stick and that's it. No vision, no guiding principles, no policy coherence. We've got attempts to keep increasing the unreliable and economically unviable ageing coal-fired plants open, rather than policy to support them with clean, affordable and renewable power.
The member for Hughes mentioned the power station in New South Wales that he wants to keep open. The reason AGL are closing that power station is that it's run its natural life. It's like a motor vehicle that was produced in the 1970s that is now not roadworthy, the maintenance costs are too high to keep it running, it's dirty, it's polluting and it doesn't make any sense to run it on the road anymore. Australians make decisions like that—to retire capital that's run its useful life—in businesses and in their personal lives on a daily basis. But the member for Hughes, because he doesn't believe in climate change and thinks that we should still be burning coal to produce electricity in this country, wants to keep assets like that open. He says that if the company doesn't want to sell that particular asset to someone and use that land for another investment—which they are well within their rights to do, as anyone in the private sector in this country should be able to—and replace it with a new asset that is more environmentally friendly, is cleaner and will produce cheaper power into the future, that's no good. He says the government should be able to come in and say: 'No, we don't appreciate that. We'll take that asset off you.' This isn't Soviet Russia. This isn't some sort of dictatorship where governments come in and seize assets.
We have this bill called 'the big stick'. As I mentioned earlier, there have been some amendments made to it. The worst aspects of the original bill have been addressed, largely because of the concerns raised by the Labor Party and by industry. While the original bill risked the privatisation of electricity assets, this bill ensures that any government owned assets that are divested must remain in public hands. There is also a central role to be played by the courts and, importantly, the ACCC regarding divestiture. In the previous bill, there was a power for the minister to divest a company of assets after going through a process. But in this case there is a role for the Australian Competition and Consumer Commission to recommend that and a role for the courts to be involved. Whilst it's not a deal, it's much more sensible legislation than what was proposed initially.
As I mentioned earlier, it won't solve the government's ongoing energy crisis. While our biggest concerns have been mitigated, we acknowledge that some industries still have worries about the unintended consequences of this bill for investment certainty. If you're trying to encourage people to invest in this country in the supply of additional power, particularly renewable energy that is cleaner, that provides jobs in the future and that caters for the fact that we have to reduce our carbon emissions over time, then this ain't the way to be doing it—to say to those investors that, if you don't produce power at a particular price, then we'll just take those assets off you. That is what this government is proposing. That is their approach to national energy policy. They are so shallow and so wracked by infighting and division around this issue of whether or not climate change is real—and the fact that you can't mention carbon emissions in anything that this government proposes—that that is the state we got ourselves into. That is the reason power prices are increasing. That is the reason gas prices are increasing. That is the reason emissions are going up. That is why our kids' future looks bleak under this Morrison government.
Pollution has gone up under this government. Despite all the rhetoric, despite the pretense now, the new strategy from the government is no longer to overtly deny that climate change exists. The new strategy is to say, 'Oh, we accept it, but don't worry; we have everything under control.' Pollution is going up year on year on year. In the time of a climate emergency, where we are being told that the Paris commitments are not good enough and that we need to do three to five times as much by 2030 if we are to have any chance of stopping dangerous global warming, pollution as going up and up and up under this government. No amount of spin can hide that. Pollution is going up. Part of the reason is that the climate denialists on the backbench have now finessed their talking points. They are dictating what the front bench does, and the climate denialists on the front bench are dictating what the cabinet and the Prime Minister do. So we have no coherent policy to cut pollution, because pollution is going up and up.
Even if we ignore the dodgy accounting tricks from the government—the dodgy accounting tricks that no-one else in the world is using—and even if we ignore the fact that we found out at Senate estimates that, when the Prime Minister says, 'We are going to account for every tonne,' most of it is from stickers on fridges and technological solutions that haven't been invented yet, it is becoming rapidly more apparent by the day that they have no plan. Even if you ignore all of that for a moment and accept that the government is going to meet its paltry targets, that is not enough. We've been told that, and Prime Minister would have found that out, had he bothered to go to the UN climate crisis summit.
We are not on track to stop dangerous global warming, and this government does not have global warming under control. Farmers who are living through record drought know that this government doesn't have global warming under control. People who live in towns where they are being told to expect water to be trucked in because they might run out of it know the government doesn't have global warming under control. The 400,000 signatories to the largest-ever electronic petition in this place know that the government doesn't have global warming under control, and they want it to declare a climate emergency. The people from all walks of life who are marching in the street know that the government doesn't have global warming under control. What they are all begging for from this government is a plan to bring down pollution and address the crisis in global warming and the climate emergency, but also address the crisis in the energy system, which the government has broken. Because of the government's intervention in the energy system, it's worth noting one fact: this comes from the government's independent Australian Energy Regulator; not from the Greens, not from the commentators but from the Energy Regulator.
Power bills are now higher under this government than when the carbon price was in place. People are paying more for power under the government. Their electricity bills are higher than they were when the carbon tax was in place and we were reducing emissions. It takes quite a feat to make electricity more expensive than when the carbon price was in place and increase emissions, but the government has done that. Why? Because it has had, as its sole aim, to stop the growth in renewable energy and to stop the phase-out of coal. We need to phase out coal and replace it with renewable energy if we're to have any hope of stopping global warming. What the scientists told us last year is that the world would need to be two-thirds out of coal, on average, by 2030 to have a chance of staying below 1½ degrees. That means that about 10 of the coal-fired power stations on the eastern seaboard would need to close and be replaced with renewable energy—basically, about one a year between now and 2030. That's what we've been told, and that's the policy that needs to be implemented if the government wants to stop dangerous global warming and keep us below the Paris Agreement targets.
To do that, you'd need some legislation that says, 'Let's work out a way of pulling out coal, pushing in renewables and doing it all in an orderly fashion so that we can bring down pollution, bring down power prices and keep the lights on.' That is doable, if that's what you want to do. But the government wants to actually do the opposite. The government's sole intention is to stop coal-fired power stations from closing and stop new renewables from coming online, and this bill is part of that. You would expect it from a climate denying government. You would expect a bill like this from a climate denying government because they want to send, and continue to send, a shiver of uncertainty through the energy industry so that people don't have the confidence to bring on the new renewables, which are now cheaper because the fuel is free and the technology is now advanced enough that they are now cheaper. To stop even the basic law of economics applying, the government comes up with a big stick, and it's a big stick that is aimed squarely at the renewable energy industry and squarely at keeping coal-fired power stations open. The government's aim is to make the whole energy sector so uncertain that it keeps coal there for longer and keeps renewables out for longer.
Interestingly, the cat has just been belled in the last few contributions from both the opposition side and the government side, because it's clear that what they want to do is use this legislation to stop companies like AGL, who have said that they want to retire some of their old coal-fired power. They have said that they want to replace an ageing old power station—and, if you haven't been there, you should go and have a look at it, because it is being held together with sticky tape and string—with a mix that includes renewables. The government said, 'No, we don't want it,' and the government said, 'What are the weapons that we can use to stop you doing it?' They set up a taskforce and they hounded out the CEO. Then they set up a taskforce to oversee it, and now they've got this legislation as well. The Liberals and Labor admit that this legislation is in part about keeping coal-fired power in the system for longer, including Liddell. The last speaker just gave a very eloquent speech against the bill, because it is a bill that is being put forward by a climate denying government that wants to keep coal in for longer and keep renewables out for longer.
Why would you help the government pass this bill that is only going to make global warming worse, make it harder to bring more renewables into the system for longer and make it easier to keep coal in the system for longer?
The government has said it wants this legislation so that it can keep Liddell open for longer, even as the company is trying to close it. The government even said before that they want this legislation so that they can go and reorganise the Queensland energy sector. They have been explicit about what they want this for. Yes, it is good if there has been some change around privatisation. That is something we raised before and we're hopeful that there'll be some safeguards here, but we're not that optimistic. But absolutely nothing has been done in any of the amendments negotiated that deal with the question of keeping coal-fired power stations, like Liddell, in the system for longer, and that is because—and I repeat this—the last contributors from both sides of the chamber have just said that this bill is in part about making sure that coal-fired power stations, like Liddell, stay there for longer.
If we have legislation that does that, we can kiss goodbye to stopping dangerous global warming because, as I said, we need to be pulling them out at a rate of about one a year and replacing them with renewables between now and 2030. If, instead, the net contribution of the Liberals, with Labor's support, is to put in place legislation that allows the minister to wave a big stick over the Liddell Power Station and the company that owns it and say, 'You'd better keep this running for longer,' we will have made it much less likely that we stop dangerous global warming and that Australia contributes to it fairly. We will have just given a climate-denying minister a big stick to keep coal in the system for longer.
The Greens will stand up to this climate-denying government, but we're getting a bit sick of having to do it by ourselves and of watching the opposition time and time again say to the government, 'Just tell us what you want and we'll give it to you.' We've seen it on free trade deals that give corporations more rights than workers and government. We saw it when Labor supported the Liberals to rip $4 billion out of public education. We saw it when Labor supported the Liberals to give tax cuts to millionaires. And now we're seeing it on climate change legislation as well. There's no point in bipartisanship if that bipartisanship makes global warming worse. For legislation, we need to look no further than what the members on the government side have said they want it for—they want it to keep coal in the system for longer, and that is what it is going to help them do.
When it gets to the committee stage, I'll be moving amendments to fix this legislation, and I hope those amendments get support. The first thing that we need to do is move amendments to say: in the time of a climate emergency, we should not be using public money to keep coal-fired power stations open for longer or, heaven forbid, build new ones. Public money should be going to schools and hospitals and making dental care available to everyone. It shouldn't be going to keep coal-fired power stations open for longer. This government has done everything it can to make global warming worse.
Farmers know that there's a link between the drought that they're experiencing and climate change. Every extra tonne of coal that this government burns sends another farmer to the wall. This government owes the farmers of Australia an apology. And, if they then add insult upon injury by saying, 'And, in fact, we're going to take your taxes and use them to make global warming worse by having more coal-fired power stations,' they should be indicted for that behaviour because it is a climate crime to use public money to make global warming worse. So I'll be moving an amendment to stop the government from giving one red cent of public funds to coal-fired power stations. That should be something that everyone in this place can support because putting money into building new coal-fired power stations or keeping existing ones open for longer is not something we should even be countenancing at the moment.
The second set of amendments deals with the issue that now Labor and the Liberals have both accepted as a purpose of this bill—that is, to deal with the situation where some companies have said, 'Actually, we wanna do the right thing and start replacing our coal with renewables.' The amendment that I will move will say that if there's a planned closure of a coal-fired power station, nothing in this bill can apply to it; the orders in this bill can't apply to it. That would give some certainty and some reassurance to places like Liddell that AGL operate, that they could continue to close in a quick and orderly fashion and replace with a mix that includes renewables without the government having a big stick hanging over them.
If we're in the business, as Labor seems to be now, of working with the government and letting them pass climate-denying legislation with the hope of getting a few amendments on the side then let's put this in the mix as well. Let's make it crystal clear that this won't stand in the way of Liddell closing, that Liddell can close and that other power stations can close and that this legislation won't be used as a barrier to it. Otherwise, we have the climate-denying government, aided and abetted by the opposition, passing laws that can keep coal in the system for longer.
I will repeat something that was said several times this week and that we're getting sick of saying: this government have only got a one-seat majority. They had to pretend to believe in climate change in order to get elected. They lost a member on the basis of climate change. They're out there pretending that they're going to take action. There will be a by-election during this parliament because there always is. This government could fall during this parliament. What we need to do is take the fight up to them on climate change, on energy, on tax and on education, not keep doing deals with them that help them improve themselves in the public standing, pass their agenda and implement their agenda to the detriment of the Australian people. It is time that we stood up to them. The Greens will stand up to this government. And, geez, it would be nice if at some point the opposition would join us in opposing this government's destructive agenda.
It's always a great pleasure to follow on from the member for Melbourne. I really think he's missing the point because the point here is about getting the cost of electricity down for consumers and business. That is what matters to those individuals. It never ceases to amaze me that we have individuals like the member for Melbourne who think they're design engineers for our electricity generators, our transmission networks, our distribution systems. I would suggest to the member for Melbourne: do you really want to be out there designing under-river tunnels? Do you want to design a high-rise building? How about a 200,000 tonne ship? Would you like to put your family across a bridge that you have designed? Yet we continue to have individuals in this place, like the member for Melbourne, who think they can design the most critical piece of infrastructure for this nation and its prosperity. I think they should take some advice, those individuals, from people who do this for a living. And I can tell you, I'm very happy to compare resumes with the member for Melbourne any time he is ready. The reality is even I wouldn't put myself up as a transmission design engineer. It is an incredibly complex role that takes years and years, decades in fact, to achieve the point where you can design, develop and deliver that type of infrastructure network.
This big-stick legislation, the Treasury Laws Amendment (Prohibiting Energy Market Misconduct) Bill 2019, is about one and thing only—that is, getting electricity prices in this country down and taking action, particularly against gentailers, and, in one case, the Queensland Labor government, which is robbing consumers. It is taking margins that are astronomical. We only have to go to a report in Queensland's TheCourier-Mail on 2 October 2019, which said: 'State-owned energy companies poured $1.5 billion of profits into the state Labor government's coffers last financial year but the dividend bonanza did not stop spiralling debt.' This was a recommendation from the ACCC in its review. It was a recommendation particularly aimed at the Queensland Labor government, the gaming of the system and the wholesale generation system in the NEM. They have now produced a $1.5 billion profit from all of the networks and generating assets that they own.
I say again to the member for Melbourne: this is about getting down the price of energy for consumers, for seniors, for people who want to be in business, for those who might want to run a refrigeration plant like a butcher, for a foundry. I have any number of examples here from small business through to big business.
I met with Shane Roberts, the owner of Pacific Coffee in Bundaberg, earlier this year, along with Minister Angus Taylor. The top three costs for his business are now wages, commercial rent and electricity. He had to invest nearly $40,000 to change his air conditioning over to try to bring down that monthly bill, because it is completely out of hand.
There is a foundry in Bundaberg, Walkers, which has been in place for more than 130 years—130 years for a heavy industry in my region. Their electricity prices have more than doubled since 2008. Enio Troiani, the manager there, told us at the start of the year that their annual power bill will climb from $1 million to $1.7 million a year—$700,000. If anybody out there thinks that these types of business have $700,000 hidden away in their bottom line that they can throw at increasing electricity costs, they've got rocks in their heads. Walkers pay 28c a kilowatt hour for electricity. That is expected to rise to 48c from next year because of new demand tariffs from the Queensland Labor government. A free audit provided by the state government in Queensland failed to find a cheaper solution. Do you know what they suggested, Mr Deputy Speaker Andrews? They suggested Walkers get diesel generators—diesel generators to replace what has been an efficient, reliable network on the riverside, in the middle of town. This is what it has come to. What hypocrisy from the Queensland state Labor government! It is outrageous.
According to the Bundaberg Regional Irrigators Group, energy costs have increased steadily since 1985 but rose sharply between 2007 and 2015. Their research shows there was about an 80 per cent increase in those eight years alone. This is simply unsustainable. It is unsustainable.
I'd say to idealists like the member for Melbourne: get off your high horse and get out and talk to people who are not earning a large salary like the member and others in this House—the ones who struggle to pay their bill every single month or every single quarter because they simply cannot pay.
This bill is about ensuring we have something we can throw at those idealists and the Queensland Labor government if they do not want to play ball. If they don't want to put down the price of energy for the people that we represent, we have the opportunity with big-stick legislation to make sure we bust up those energy companies and provide competition. It won't be privatised; it's more GOCs. In fact, it's the exact position that Queensland used to have not that long ago. It's the Queensland Labor government which has combined all those assets, taken away competition, driven up prices and continued to rob $1½ billion from consumers.
I say it again: this bill is about getting electricity prices down. It is tough but necessary legislation, and I absolutely commend Minister Angus Taylor for putting it forward. If the Labor Party are supporting it, I will certainly support what they are doing. This is critical for our nation. It is critical for business, moving forward. We have to ensure we maintain industry in this country, and industry needs to be competitive on energy prices.
I rise this evening to make a contribution to this debate on the Treasury Laws Amendment (Prohibiting Energy Market Misconduct) Bill 2019. This is a bill that lapsed at the end of the last parliament. It gives the government a raft of new powers, including, in the case of extreme misconduct, the ability to force an electricity company to divest assets. Labor opposed the first version of this legislation, which left the door wide open to privatisation of state owned generators and lacked the checks and balances that are fundamental to such intrusive state powers. Since then, the government has made some substantive changes, and the bill before us addresses the most serious deficiencies in the bill that we saw in the 45th Parliament. For this reason, Labor won't be opposing it today, although we do have some substantive amendments. However, this is far from the main issue when it comes to electricity and this government.
The real issue here is that the legislation is little more than a transparent attempt at distraction from the fact that this government has simply failed to do its job. This government's belligerent refusal to do anything about ballooning electricity prices is absolutely shameful, and now, in a tacit admission of its own powerlessness, it is resorting to threats, intimidation and bluster in the hope that no-one will notice it's not in control. Indeed, this bill is a humiliating admission by the Liberals that they have colossally failed to deliver clean, reliable and affordable power—not only that, but the government has also tried to set fire to all of the existing policies Australia had to reduce emissions and encourage the production of cheap, clean electricity.
The government thinks that these powers will reduce electricity prices. Labor is deeply sceptical that this will be the case. This bill certainly won't do anything to fix the serious energy crisis facing this country that the government itself has created. When it comes to energy policy, the Abbott-Turnbull-Morrison government has demonstrated time and again that it's pathologically incapable of delivering the leadership that this country so desperately deserves and needs.
Energy is a fundamental element of every economy. It plays a huge role in the competitiveness of business and contributes significantly to the cost of living for citizens. As the single highest-emitting sector, it will be fundamental to slashing pollution and meeting our international climate obligations. But after proposing and then knocking off 16 different energy policies—that's right; 16—not to mention two leaders, the government has crawled to a standstill on this vital policy area. The truth is that, at the end of day, Mr Morrison has utterly given up on advancing the national interests, in favour of saving his own job. Make no mistake: responsibility for ballooning electricity bills lies squarely at the feet of this government. Australia has bountiful natural energy advantages. With the right energy policy, we should be able to attract investment, create jobs and drive down emissions—and all of us will benefit from clean, reliable and affordable power. But this government has gone to civil war with itself, ensuring that this will never happen under its watch.
Australia is now in the midst of a full blown energy crisis, thanks to the inability of successive Liberal Prime Ministers to listen to the experts and stand up to the anti-science knuckle-draggers in its party rooms—the very people who, for some unfathomable reason, seem to call the shots when it comes to energy policy. Over the last six years, this government has had no less than 16 policies—I repeat: 16—and not one of them got approval from the rabid right to get past the starting blocks. As a result, we are now seeing rising emissions, shrinking competitiveness, ballooning energy prices and an unwillingness from business to invest until government delivers policy certainty. Wholesale power prices have climbed 158 per cent since 2015. Business is hurting, household budgets are getting smashed and, tragically, millions of Australians are still struggling to keep the lights on. Indeed, households are having their electricity disconnected at an alarming rate, because they can't keep up with the spiralling costs. Of course, it's the most vulnerable people—the very people already under siege from this government's savage agenda—who are getting hit the hardest.
Last week, in Anti-Poverty Week, St Vincent de Paul put out an important report looking at household electricity disconnections across the country. It gave a stark picture of just how bad things have got. It showed that, far from being an anomaly, disconnections are commonplace. In my community the figures are shocking. I would like to read some out today. In postcode 2300, which takes in the inner-city suburbs of Newcastle, Cooks Hill, Bar Beach, Newcastle East and The Hill, a staggering 6.4 per cent of households had their electricity disconnected between July 2015 and June 2018. Newcastle West residents did not fare much better, with 5.99 per cent of accounts being disconnected. Hamilton, which is home to a large number of extremely vulnerable people living in public housing, wasn't far behind, with 5.93 per cent of all accounts disconnected. Indeed, out of every single populated postcode in my electorate, the very lowest disconnection rate was 2.4 per cent of households. That is thousands of households across Newcastle. This is appalling! This government has abandoned the most vulnerable people in the country and left a policy void the size of the planet, just so it can appease the climate change deniers that populate its own party room. Yet again, the government has chosen personal interest over the national interest. This government needs to stop its childish factional bickering, get over its aversion to science and deliver an energy policy that will drive investment, create jobs, bring down carbon emissions and cut electricity prices.
Clearly, this bill won't end the Liberals' energy crisis. It will do absolutely nothing to address the fundamental problem: the government needs to deliver an energy policy which gives certainty and supports investment in clean, reliable and affordable energy. As we've seen in recent years, energy for the Liberals isn't so much a sector as a means of tearing down leaders. Malcolm Turnbull tore down Tony Abbott for his failure to do anything, only to find himself torn down for hinting he might want to do something. Now Scott Morrison knows the lay of the land, and he's doing exactly what he needs to do in order to keep his job, and that is nothing. What a sorry state of affairs.
The narrative around energy that you hear from those opposite is unlike anything you'll find outside right-wing conspiracy blocs. In the real world, everybody understands that we must be charting a path towards a decarbonised economy. Beyond this House, people understand that government needs to provide policy certainty for business to invest. Outside of this place, experts agree that we should be setting the policy levers to encourage investment in the cheapest form of energy, and that is renewables. Sadly, the rest of the world understands that we have a limited time frame for action. And yet, when I step into this chamber, I get transported into a parallel universe—an alternative reality where the planet is not getting hotter, where business doesn't need certainty, where renewable energy is the devil and nuclear energy is a viable way forward. But, unlike the fairytales those opposite tell themselves, the reality is that they've sent Australia down a path of higher pollution, more expensive energy costs and reduced competitiveness for business.
As I mentioned earlier, we've seen wholesale power prices climb by 158 per cent since 2015. Emissions are on a relentless path upwards. Businesses are losing contracts to overseas competition. Households are struggling to keep their heads above water. Consumers are closing their wallets at the very time we are seeing growth slow to a crawl. And, of course, just like the member for Wentworth before him, Mr Morrison is far more focused on keeping his own job than developing a responsible energy policy in the national interest. So, here we are. We have a government that's brazenly abandoned any plan for either energy prices or climate change. We have a government that has created a policy void the size of a planet. And we have another leader so desperate to keep his job that he won't even try to stand up to the knuckle-draggers on the government benches that have so damaged this country with their refusal to accept the science. Now the government has backed itself into a corner, with its only remaining option being to shake a big stick at electricity companies.
As I've outlined, this is the second version of this bill. The first one was originally developed in response to an ACCC electricity pricing review. It gave government broad powers to insert itself into private energy businesses. This included the power to force companies to divest their assets—importantly, something that was never recommended in the review. Thankfully, the first version of this bill never came to a vote. I suspect that is because there was a very real chance the unthinkable would happen, and that is that the government would lose on the floor of parliament.
While this isn't a bill Labor would have drafted, we can see that the most objectionable elements of the former bill have been removed. Indeed, Labor was very concerned that the provisions in the former bill would have allowed divestment orders to be used to transfer state-owned generation assets to a private operator. It's no secret that privatisation of the electricity sector has hurt our country. Before privatisation, Australia had some of the lowest electricity prices in the world. They had been dropping for years. Nonetheless, since the 1990s Australians have been told splitting and privatising electricity functions would deliver more competitive organisations and cheaper power. Well, of course, this hasn't happened. Prices ballooned by 170 per cent from 1995 to 2012. This is four times the CPI growth. When the McKell Institute looked into the issue, it found that the private networks underperformed their public counterparts and had higher overheads. The Australia Institute also found that private electricity networks had reduced work output and higher staffing costs, particularly in management levels.
This is why it's so important that the government removes privatisation in the version of the bill before us today. There are other substantive changes, too, including a much greater role for the ACCC and Federal Court to provide oversight and advice on the exercising of these new powers. This is important. It is always preferable for an independent expert body to be overseeing these decision, ensuring that they can't be used intemperately for political ends.
Again, this isn't a bill that Labor would have delivered. Indeed, we would have focused on delivering the coherent, coordinated, national energy plan that all the experts agree this country needs. That being said, we are not on the government benches and we accept that some changes have been made to remove the worst elements of the former legislation. However, while we're glad the government has explicitly ruled out full privatisation, we're still concerned at the potential for part privatisation. That is why we will be moving an amendment that will guarantee this cannot happen. We will also move another substantial amendment to ensure that workers' rights are maintained in the event of divestment. However, we're still worried about unintended consequences. For this reason, we're moving amendments that will mandate a review of the operations of the bill.
In summary, while this bill is not as odious as the one the government brought before this place in the last parliament, it will do nothing to address the real issue, which is the government's egregious and belligerent refusal to do its job on energy policy.
I must say that the Treasury Laws Amendment (Prohibiting Energy Market Misconduct) Bill 2019 is a very welcome and long-awaited piece of legislation. It addresses market misbehaviour in the electricity market that has been evident for some time to insiders and economists who understand the complexities of the market, well before the ACCC inquiry into electricity pricing. That inquiry confirmed what a lot of people understood already, but the average family and the average small business have just suffered increasing energy bills. They have all known that something is badly wrong with our energy system and wanted a better deal. There are several drivers of our high-cost electricity system, which previously was a very cheap and abundant commodity that has been delivered reliably for decades.
The ACCC report identifies market misbehaviour in both the wholesale and the retail markets, as well as in the contract markets. The ACCC identified that retailers have been confusing customers with myriad deals and attendant discounts, but the discounts were based on excessively high standing offers. You can always offer a big healthy discount if the base price at which you're starting your standing offer is very high. We have already addressed this by implementing the default market offers and reference prices, which have delivered transparency and made it easier for people to compare. This system came into force on 1 July.
There are other things that the ACCC report identified, like withdrawal of generating supply, save, for example, scheduled maintenance. If you take out one of your generators at a time of high demand, you don't need to be a rocket scientist to work out that that will deliver a higher price for the generating company, if they only have to operate half the amount of supply, and they short the market. It also gives them an avenue to fill the missing electricity from some of their other assets, like renewables. They not only get a payment for the electricity—and the price is higher—but also are able to access renewable energy certificate prices.
The bill that people pay for electricity comprises many components; I might just put it on the record for my consumers and constituents in the Lyne electorate. The bill one pays includes a cost that the retailer assembles from, namely, the cost of the generation; the cost of the poles and wires; the retailer's costs themselves; and the cost of the renewable energy certificates. I might add—and it is not related to this legislation—that the Renewable Energy Target mandates that retailers have to have certificates to prove that they have sold enough electricity. Some of these retailers are also businesses that run generation; they run power stations, wind farms, coal-fired power stations or solar farms. They also run the retail end of the price that you pay. Some of these gentailers in states like Queensland and South Australia have got, essentially, the dominant share of the market, and they can access a pay point at each of those three parts of the deal. In those states, where they basically have control of the market, they are able to restrict in the contract markets to prevent other retailers of smaller size from entering their market.
This bill will amend the Competition and Consumer Act to define energy market misconduct and what is prohibited, and provide a series of graduated and targeted remedies. It will define a retail pricing prohibition, focused on conduct by retailers where they fail to reasonably pass sustained and substantial electricity supply chain cost savings to their end consumers. It also defines and creates a contract liquidity prohibition to prevent energy companies from withholding hedge contracts for the purposes of substantially lessening competition. It also creates a wholesale conduct prohibition to stop generators from manipulating the spot market, such as by withholding supply.
The graduated series of remedies can start with infringement notices, or contracting orders that the ACCC demands, through to court-ordered civil penalties which are financial—and they are very considerable. In that system the greatest penalty would be a $10 million fine, or three times the value of the total benefit attributed to the misconduct, or 10 per cent of the annual turnover of the corporation in the 12 months before the conduct occurred. The Treasurer can issue contracting orders upon the recommendation of the Australian Competition and Consumer Commission. That will permit the Treasurer to make the corporations provide their generating assets and electricity contracts in the contracting space, so that we will have more retailers entering these markets.
Finally, I turn to the divestment part of this legislation. As you probably appreciate, the EU has divestment powers during mergers and acquisitions, and Australia does have divestment powers—usually in the acquisitions space, or where there's substantial lessening of competition—but in the electricity market, at this juncture, until we get this legislation through, we won't have those as a threat for profound and prolonged abuse of the market, and that is the so-called big stick. Without this sort of sword of Damocles hanging over gentailers, we won't be able to effectively stop this misbehaviour.
The legislation requires both the ACCC and the Treasurer to be certain that misbehaviour has been genuinely proved and continues. The divestiture orders can order the company to break up its assets, but the conduct can't just be a one-off; it has to be fraudulent, dishonest and in bad faith, and it has to be proven, before the court, to have been done for the purpose of distorting or manipulating prices, and the order has to be proportionate and targeted to the conduct. The legislation will apply also to government owned enterprises, but we have seen and we have noticed incredible increases in the charges in Queensland, where the dominant suppliers and retailers are government owned entities. The legislation does have a sunset clause out to 2025, and there are extra powers, increased information-gathering powers, for the ACCC, for monitoring, so that orders can be justified by facts.
I think the legislation will improve behaviour in the market. There are many other causes of increased costs, and some are not bound up in this legislation, but this legislation will address some of the most egregious market misconduct. As I mentioned, there are other initiatives that we've already brought in to correct the system. These include the default market offer and reference pricing. We've got the Retailer Reliability Obligation in place. We are also working on other things to improve the security of the electricity system.
So, in essence, this is a very important piece of legislation. Cheap, affordable, reliable electricity is like water for an economy. People can't survive without water. Economies that are industrialised, and the modern world, can't survive without cheap, abundant, available electricity. Otherwise, we would lose all our industrial capacity, all our value-adding capacity, whether in the processing of food or minerals, and all the accoutrements of modern everyday life—from your mobile phone to your iPad, to your house, to your car, to roads—are manufactured with energy. So the sooner we can get back to having affordable, reliable electricity, the sooner all of those sections of our economy, as well as small businesses and families, will be much better off. I commend this bill to the House.
I speak with considerable authority in this area. I was the Minister for Mines and Energy in Queensland. We had the cheapest electricity in the world. The proof of that was that the announced aluminium processing plants for Canada—and Canada, arguably, before us, had the cheapest energy in the world—decided not to go to Canada to use their hydroelectric power but to come to Queensland to use our power. The reason we had the cheapest electricity in the world, and why we were always accused of being the biggest socialist government in Australian history—looking back on it, if you define that as government ownership, I suppose we were, but you most certainly wouldn't use that word to describe the ALP; they were the ones who sold everything off—was that we had a policy of delivering to the people and industries of Queensland the cheapest electricity in the world. I pay great tribute to Sir Leo Hielscher, as well as to the late Ron Camm and the late Joh Bjelke-Petersen. They negotiated that if you wanted to mine coal in Queensland then you gave one per cent to us. It is called reserve resource policy. It used to be the policy of the old Labor governments, but today the Labor Party represents the exact opposite point of view; they believe in screwing everyone to get the money off them. We believed in taking one per cent of the coal as a reserved resource. That's for the people of Queensland. Would to heaven that someone in this place had had the brains to do that with the gas industry—$36 billion coming into the Australian economy and boomeranging straight out again, because the collective wisdom and brains of this place sold it for 6c a unit; we Australians now have to buy it back at $16 a unit.
The cost of producing electricity is based upon three components. One is coal. We had the coal for free in Queensland. Two is labour costs. We built the biggest power station in the world, Gladstone: 1450 megawatts of power. It had exactly the same manning levels as tiny little Collinsville. Collinsville was producing 180 megawatts; Gladstone was producing 1450 megawatts. The labour costs were negligible. The repayment costs on the construction were very sizable indeed, but over a 17- or 18-year period we had paid off the debt on the power station, so there was no cost for debt servicing. There was no cost for the coal; under the reserve resource policy it was free. The only cost was the power station workers, who were on more money than a member of parliament. The workers were getting an extremely good deal under the much-maligned Bjelke-Petersen government.
But we delivered the cheapest electricity charges in the world, because we were not worried about this free market rubbish; we were out there to make a quid. Unlike in this place, we were all from business, farming and aspirational backgrounds. A lot of us were workers, but we were workers out there to make a quid and get ahead in life. That's the difference between our government and every government in Australia in the last 25 to 30 years. They don't comprise anyone who fits into that category. We had the cheapest electricity charges in the world.
Shane Knuth, state member for the KAP, the political party I belong to, constantly quotes Peter Beattie, who said, 'When we open the electricity industry up to competition, electricity prices will go down.' Australia has very accurate graphs for Victoria, Queensland and South Australia, and all of those graphs are flat lines up until 1999, then suddenly in the year 2003 the graphs are almost vertical. The price goes straight through the roof. The price in Queensland was $670 per household for 11 straight years from 1988 to 1999; after 2003 the price shoots through the roof and it's $2,400 per household. What happened here? Why did the price suddenly skyrocket? There are reasons why the figures are not available in New South Wales. In Victoria, South Australia and Queensland, it's a flat line. There's no increase in price. We couldn't justify an increase in price. We didn't have any increases. The price of coal didn't worry us because we got the coal for free. The price of labour was negligible, and we'd paid off the power stations, so we couldn't justify asking for anything more than $670.
But, when privatisation came on the scene, what did you expect to happen? Just how dumb and stupid are you in this place? What did you expect to happen? If you sold all of the electricity industry in Australia for $150 billion, because that's about what it was, then the people who bought it would have to show a return on their investment, and, not unnaturally, they asked for a nine per cent return. So, suddenly, the electricity consumers of Australia had to find an extra $15 billion a year. We're talking about 2½ per cent of the entire federal budget at $15 billion a year. Electricity prices had to show a return on invested capital. I mean, how could you not see that? Then you say, 'Oh, it's just a failure of market mechanisms. It's just oligopolistic pricing; it's monopoly type pricing.' No, it's not. It's a valid return on invested capital. We didn't have any capital to serve because we'd already paid it off. The previous speaker left out a little bit: them being involved in wanting to sell the rest of the assets in Queensland.
I warn the people in this place. I warn you. In Queensland, we've got a little more brains than you in other states, because, when that state government sold those assets, it suffered the biggest landslide in Queensland's history. Anna Bligh led the government of Queensland. The ALP were the government of Queensland. After the election, they had, I think, five seats. That was all they were left with: five seats. So two people voted for Annastacia Palaszczuk. She became the Premier of Queensland on two votes! Now, the Liberals were so stupid that they went to the next election saying they were going to sell the rest of the assets. So one party sold the electricity industry, corporatised it, and sold the railways and got annihilated by the people of Queensland, and the other party was so stupid that they proceeded down exactly the same pathway. Surprise, surprise: they got annihilated in the second biggest landslide recorded in Queensland's history.
So I warn you: you try and privatise the electricity industry in Queensland and the people of Queensland will 'kill you'. I am proud to be able to say that in this place and be able to back it up with two election results. You may be stupid enough to even think about proceeding down that pathway. The world exploded when this legislation came in. I and the ALP saw it as a sneaky plot to sell off the assets in Queensland—to force the sale of the assets in Queensland. The sneaky Queensland government corporatised the asset. They said, 'It's an asset of $30 billion. We've got to get some return on our investment, of course.' So Queensland fared no better than any other state under the corporatised model.
We now lie with the aluminium industry which came to Queensland. This was our third biggest industry in Queensland, because we had the cheapest electricity charges in the world. Do you know what's going to happen now that we have, arguably, the highest charges? The last graph I got had Australia with the highest electricity charges in world. Now that we've got the highest electricity charges in the world, what do you think is going to happen to the aluminium industry? Aluminium is just congealed electricity. The vast bulk of the cost of aluminium is the electricity element. So the Queensland government want to close down the coal industry. They want to close down the sugar cane industry. The third-biggest industry is aluminium and, as sure as the sun rises tomorrow, it's going to vanish because we have the highest electricity charges in the world. It's not as quite as simple as I'm making it out to be but it is a fair call to say what I have just said. When you go down a pathway and you make a terrible mistake and you say, 'Oh, no, I wasn't wrong; I'm going to continue to do it,' you make a bigger mistake and a bigger mistake and an even bigger mistake and eventually the history books write you up as the worst government in the entire history of Australia, and that judgement has to be passed at the present moment.
We have no economy left now. We only have two industries. We're not a mining country. Mining is when you dig it out of the ground and sell the metal. That's mining. We dig it out of the ground and sell the ground. That's called quarry, so we have two quarries. We have an iron ore quarry and a coal quarry. I think the coal issue will be about $70,000 million and I think the next item down may be aluminium or cattle, which is about $12,000 million, so this economy only rests upon two products now. If either of them falter, God help Australia.
There are people in this country who want the coal industry closed down. Forget about buying your biros from overseas, your clothing from overseas, your cars from overseas, your petrol from overseas, your white goods from overseas, your mobile telephones from overseas because you won't have any money to buy them. You've only got two sources of income now. I mean, the wool industry carried this country for 150 years and Mr Keating, the greatest Treasurer in the world, easily the most atrocious Treasurer in this nation's history, deregulated the wool industry. Well, surprise, surprise, wool dropped down to one-third of the price it had been before deregulation. Well, that was fairly predictable because when Doug Anthony introduced the scheme, the price went up 300 per cent. When the scheme was taken away, the price went down. Well, too late now. Some 70 per cent of your wool sheep have gone. There are some fat lambs left but that's only 62 per cent of the sheep herd.
So we come to the situation of today. I think we all like Josh, the Treasurer. Even his Liberal partners, if they were honest, would say he's a very likeable person, right? But he's locked into a conventional wisdom, the free market ideology, and he can't ever see outside of that. Now, if the free market philosophy, ideology, operated in this country, there would have been no wool industry, which carried the country for 150 years. There would have been no wool industry because farmers were given the land for free by the government. The government believed that it should back the farmers and gave the land to John Macarthur and all the rest of them for free. There would be no aluminium industry, there most certainly would be no coal industry but there may have been an iron ore industry, I'd have to say.
What would this country be left with if we had that free market ideology operating over the last century? There'd be nothing left of this country at all. I mean, even the tourism industry in Queensland was sparked off by us giving land free to resort developers, Keith Williams being the leading one. We all know that the biggest man-made tourist attraction in Australia by far is Sea World and that land was given to him for free on condition that he built it. So you can have no government intervention, you can have your free markets, but there is no other country on earth that is marching to that drum. (Time expired)
As an Independent, I see my role as advocating for sensible, evidence-based policy that addresses the needs of Indi and the interests of Australia. When I look at this bill, I am not convinced that it does this. The energy minister says this bill will reduce electricity prices by stamping out bad behaviour on the part of electricity companies. I have looked intensely at this question and I don't think the evidence supports this claim.
According to the ACCC, the effective price paid by residential electricity customers has increased 56 per cent in real terms, from 19c per kilowatt hour in 2008 to 30c per kilowatt hour in 2018. The average bill jumped from $1,200 a year to more than $1,600 a year. If we're going to reverse that we need to why. Writing in the Australian Financial Review, the minister says that electricity prices are high because of 'deliberate manipulation of the wholesale market', where companies artificially constrain supply to boost prices and hike their bids in the spot market. That's a big claim and the energy market is complex. So how do we know if it's happening? Luckily for us, the government asked itself this question and we have the answer—and it's a no.
In 2017, the then Treasurer, now Prime Minister, asked the ACCC to conduct an inquiry into the causes of retail electricity prices and provide recommendations as to how to tackle them. In June of last year, that inquiry was handed down. According to the ACCC, wholesale prices made up just a quarter of the increase that people have seen. The largest contributor was network costs, which the government's bill does not address. But did wholesale prices go up to 'deliberate manipulation', as the minister says? According to an ACCC report, that the Prime Minister himself commissioned, no, they did not; that behaviour did not happen. The key problem this bill claims to solve is not happening.
But there's more evidence. In November 2016, the then Minister for the Environment and Energy, now the Treasurer, and the then Treasurer, now the Prime Minister, asked Australian Energy Regulator to closely monitor wholesale prices to catch any abusive wholesale market behaviour following the closure of the Hazelwood power station in Victoria. In March last year, the regulator released their findings. They said:
Our analysis did not identified instances where the opportunistic exercise of market power significantly affected average price outcomes in Victoria or South Australia since Hazelwood closed.
Then, in December, the AER released results of yet another investigation, saying that, 'despite this vulnerability to the exercise of market power, we did not identify short-term behaviour as contributing to recent price rises'.
That's three major studies commissioned by the government, conducted by the government's own agencies, that directly refute the central claim used to justify this bill.
The minister has spoken publicly and often of one study that did find evidence of abuse. This was a working paper from an economist at the Victorian Energy Policy Centre. However, that report has been widely criticised as being deeply flawed. Frontier Economics wrote:
The numerous methodological and procedural flaws in the Mountain-Percy report leave the evidence well short of that required to allege serious wrongdoing by market participants. Certainly, the report does not provide any suitable justification for the government’s misguided interventions in the NEM.
The Grattan Institute's Tony Wood put it more simply: 'The government is trying to solve a problem that doesn't exist.' Electricity prices are high but there is insufficient evidence to conclude that it is because of abuse of the wholesale market.
The latter part of the 'big stick bill' addresses huge margins for retail companies. This contributed just 13 per cent of the price rise, but there is some truth to this claim of the government's. According to the Grattan Institute, retail electricity companies have significantly higher margins than other industries and it's well established that they gouge customers. This is an area where I do support further policy.
But what concerns me about this bill is not only that it might fail to address the real problems in the electricity sector but also that it might threaten investment in new energy infrastructure in our regions. My electorate of Indi, like most in Australia, is not a fossil fuel electorate. There are no jobs in fossil fuel mining or energy generation in Indi. Instead, we are a renewable electorate. In the Hume region, we produce 1,700 gigawatt hours of renewable electricity every year—about as much as a small coal-fired station. We get our energy from solar farms, from 20,000 rooftop solar PV installations and from major hydro generators that bring jobs and income to the towns of Dartmouth, Mt Beauty, Eildon and Yarrawonga. At the Barnawartha biodiesel plant, 16 employees produce 50 million litres of biodiesel every year.
In my electorate, renewables are jobs. By introducing an extraordinary power that has never existed in this country before, the government risks scaring off investment in a crucial industry for regional communities. The Business Council of Australia has said:
… this legislation has the potential to make things worse, perversely creating even more uncertainty and discouraging new investment in the energy sector.
You might think, 'Well, big business would say that.' But what about the Human Rights Commission? They say they are robustly opposed to the creation of unilateral divestment powers for the Treasurer—that such discretionary and quasi-judicial powers represent deep and genuine sovereign risk, and, if enacted, these powers would cast a pall over investment in all sectors of the Australian economy. And the Energy Users Association, the people this bill is supposed to be helping, said:
The investment uncertainty that passing this Bill will create will only increase the risk faced by the electricity supply chain. A risk that will inevitably be passed on to our members in the form of even higher prices …
Right now, we have interest in almost three gigawatts of renewables projects just in my electorate and the Hume region alone, covering all of my electorate and that of my neighbour, the member for Nicholls. That's two Hazelwoods worth of power. If built, these projects would bring $4 billion to the local economy and supply us with the cheapest form of power going around. On top of that, in the mountains of Indi we have the potential for enough pumped hydro storage to supply Australia's needs 13 times over—6½ thousand gigawatt hours. That's seven Snowy Hydros. The minister talks, rightly, about the need for greater investments in dispatchable power and storage to support the integration of renewables. But how will we attract this to Indi, where we have the best storage resources in the country, with the government creating this type of sovereign risk?
In recent weeks, I've listened to many views, and the message I keep hearing is that this law will not help drive investment in our region. The CSIRO estimates that Australia needs $400 billion of investment in utility-scale generation over the next 30 years. This is because our antique coal plants are breaking down and being retired, and will need to be replaced. The best thing we can do to drive down prices is to bring on this investment in the cheapest form of power we have and create a policy framework that incentivises investment in storage and firming to support the integration of those renewables.
Sadly, I fear that this bill risks undermining the good work the government has done, in fact, to lower prices. Analysis by the Grattan Institute of futures contracts in the mainland electricity market shows that prices are expected to trend downwards to around $70 per megawatt hour. This is the government's 2021 price target. The interventions the government has already made seem to be working. The market is correcting itself. The government talks about the closure of the Liddell station as needing urgent action—possibly under the powers of this bill—to ensure that New South Wales doesn't run out of power. But the government's own projections released just a few weeks ago, the 2019 Electricity Statement of Opportunities, show that New South Wales will remain well within the reliability standard even after Liddell closes, and that's not even counting new generation assets that will come online in the next three years. The pressure the government has already placed on companies and the impact of its retailer reliability obligation seem to have worked. In a worst-case scenario, just 0.0019 per cent of electricity demand will be unmet in New South Wales, up from 0.001 per cent today. Finally, the government's introduction of a default market offer will lead to savings of $500 to $800 for some households, and the early evidence indicates that this is already happening. The government do not need to introduce this bill, because they've already got us on the right track. I fear this big stick will wack us back to being off course.
I opened my remarks by articulating how I see my role as the independent member for Indi. My role is neither to necessarily support nor to oppose whatever the government does but to look at legislation on its merits and do what I can to improve it, and here are three concrete ways we could improve this legislation. First, we could introduce a sunrise trigger. We should empower the Energy Regulator with new powers to investigate market misconduct. If, after one year, they find evidence of companies engaging in the types of misconduct under consideration, the bill would automatically come into effect. Right now, the government claims we need new powers to punish bad behaviour, and the companies say the behaviour doesn't exist. Let's call both their bluffs. If the companies are so sure it's not happening, they won't mind a year of scrutiny from the AER. Equally, if the government is convinced it's happening, they'll have nothing to fear from making the legislation contingent on finding evidence. Second, we need to remove the powers of the Treasurer to make unilateral decisions. In its current form, the bill enables the Treasurer of the day extraordinary and inappropriate powers. Cooler heads must prevail. Third, we must amend the bill to ensure it cannot be used by the government to force coal stations to stay open for longer than they planned. If this happens, it will threaten investment in new generation and keep prices higher for longer. This big stick cannot become an ideological whip for the government.
As I laid out today, I have deep reservations about the bill. However, it is clear this bill will pass, so I must decide what role I will play. On the night I was elected I committed to working with the government, whoever it may be, to improve policy. I believe that, if this House can soften the bluntest edges of this bill and the government is then willing to listen to communities on the ground and work to increase investments and jobs in renewable energy, we may have a constructive path forward. I will be supporting sensible amendments to this bill, like the changes I have outlined today, but I am willing to support passage of the bill through the House. I do so with deep reservation, but I do it believing that I can work with rather than against the government and I can achieve the most I can for Indi and for regional Australia.
Now I speak directly to the energy minister. You have assured the nation this bill will not slow investment in renewables. You have assured us this bill will not be misused. So our eyes turn to you. You have promised much, and now you must deliver. We look to you to see what you will do to ensure investments in renewables and storage remain high. We look to you to see how you will convert our $4 billion renewables pipeline across Hume into actual investment. We look to you to see how you will give confidence to the energy market, and we look to you for ways to export our knowledge to the world to reduce emissions overseas that are harming our communities here. You will get your stick, but Australia needs its carrot. I extend, again, my invitation to come to Indi to learn from our nation-leading, community renewable projects and find ways to develop with us our potential for storage. We look to you. We want to work with you, and we will not blink.
While I note the sincerity and the thoughtful contribution by the member for Indi, I would not be holding our collective breath if we're waiting for this current minister for energy to come up with anything that resembles an energy policy of any coherence in the country. When we look back on history and ask ourselves what the point of the Abbott-Turnbull-Morrison governments was, it certainly won't have been to deliver coherent energy policy for our country, an energy plan that can deliver our nation reliable, clean and secure energy into the future in a much-advancing and rapidly-changing grid. As the world evolves around us, Australia sits still under the watch of this government and under the watch of this energy minister.
The Treasury Laws Amendment (Prohibiting Energy Market Misconduct) Bill 2019, also known as the big-stick legislation, is a classic example of a government who, instead of having a plan to actually reform our energy market, gives us a big stick. While this bill, after the amendments put forward by the member for Hindmarsh as well as the second reading amendment put forward by the member for Rankin, can be supported, it can't stop with this bill. The original concerns put forward by the Labor Party in regards to this bill were to ensure that this bill didn't become a tool for backdoor privatisation. We didn't want to have a situation where workers were fighting for their rights under the Fair Work Act; therefore, we have sought amendments to ensure that those rights are safeguarded. Labor also is providing conditional support for basic worker rights and partial privatisation to be completely ruled out by the government.
This government, under their watch, have completely failed to provide energy policy to our country. It is no surprise that hardly any members of the government are coming to defend their big stick, because it is not going to provide the long-term certainty, strategy and coherent policy that our country needs. And while they dither and do nothing and have no plan for our energy market, small businesses suffer, retailers suffer, mums and dads suffer and households suffer because this government have been saying that they're going to bring down our energy prices. I think the former title of the current Minister for Emissions Reductions and Energy was the 'minister for reducing power prices'—or something that they usually put in the title of a bill—and, instead, we've got nothing. All the while, prices have gone up, gas prices have tripled, wholesale power prices across the national energy market have skyrocketed, and household budgets and retailers have felt the pressure. Thousands and thousands of manufacturing jobs are constantly being strained by this government's failure in energy policy.
So what have the government done? In typical government fashion, they have ordered reviews. Let's get a review. Let's review it. Why not? Let's have a look at the review. We had the Finkel review that led to nothing. AEMO, the Energy Security Board, industry and Infrastructure Australia have all had a look. The government have had energy minister after energy minister yet have no ability to actually bring forward a policy. We all remember when they used to have one.
The last Prime Minister who actually had an energy policy was Malcolm Turnbull. But, sadly, his time in this House was cut short by his own party. I thought that the energy crises that have constantly riddled the coalition were summed up very nicely by an article in The Guardianon 1 July 2019. The title of the article reads: Malcolm Turnbull pulled back from NEG legislation after Dutton and Pyne 'went nuts'. Dutton and Pyne went nuts, according to The Guardian. I'll read a small excerpt of the article into Hansard for the benefit of the House. In her new book, Nikki Savva says Pyne argued in favour of putting the National Energy Guarantee on ice to stop the Liberals 'leaving a trail of gore behind us'. The article went on to say:
'Turnbull’s plan was to bring the NEG on [in parliament],' Dutton is quoted as saying by Savva. 'Pyne and I went nuts.'
… … …
'It was never going to happen. There were 20 people on our side who were not going back to their electorates with photos of them sitting next to Tanya Plibersek voting on a motion supporting climate change.'
'It would have been a complete disaster for the government. We effectively had the bill pulled.'
Now that's what life's like inside the coalition party room, where you have the moderates and the conservatives both working together to pull down energy policy by the former Prime Minister. So what happens? The then energy minister, now Treasurer, left parliament without a bill. It worked out okay for him; he ended up becoming the Treasurer. We all remember the smile from ear to ear that he had walking out of that sorry caucus room after having an awkward exchange with the Prime Minister and a photo out the front. But of course the then Prime Minister, Malcolm Turnbull, did not survive that exchange and that was the final nail in the political career of Malcolm Turnbull. Instead of providing energy certainty, certainty to investors and a coherent climate policy, Dutton and Pyne went nuts. I think that says it all about the ability of the Liberals to provide coherent energy policy.
I was listening in my office to the prior debate. The Greens are continuing to lay on their lectures to everyone else in this House. Now, I at least acknowledge the fact that the Greens want to bring down our emissions. That's a good thing. But we cannot forget the fact that a decade ago Tony Abbott, the former Prime Minister, and his partner in crime Christine Milne, voted together to kill off the Carbon Pollution Reduction Scheme, the CPRS. That brought on a decade of policy inertia. Yet not once have we heard from the Greens that they take responsibility for voting with Tony Abbott to kill off any chance for Australia to have a coherent policy to reduce the amount of carbon in the atmosphere. Not once has the member for Melbourne come into this place and said, 'You know what? We got that wrong.' I haven't heard any Greens senator in the other place say, 'Maybe if we had our time over we wouldn't have voted with Tony Abbott to kill off our country's chances of tackling climate change.' Not once did that happen, and I'm not going to hold my breath waiting for the Greens to come into this place and admit that they got that one utterly and definitely wrong.
So, what have we got now? We have a federal government without an energy policy and without a plan. We have a federal government that, instead of providing our country and our investors with the certainty and the direction and the vision to actually create sustainable, clean, reliable energy in this country, has given us a big stick. Let's contrast that to what's been happening in some of the states, because there hasn't been failure around the entire country. Rather, the failure has been prevalent inside the Liberal and National parties here in Canberra.
Let's start with Victoria. There is legislation on the books, passed through the parliament, outlining climate targets. There is a bill on the books in Victoria that moves us towards net zero emissions by 2050. Victoria has a renewable energy target, which is creating thousands and thousands and thousands of jobs, not just in the inner city, as I know many like to label it, but thousands of jobs in the burbs and in rural and regional Victoria. It is creating jobs for Victorians building wind turbines. One is at the old Ford factory, which I spoke about the other day. After those opposite goaded the car industry to leave this country, the Geelong Ford factory was shut down. Now, thanks to the investments made and the policy certainty given by the Victorian government, wind turbines are being manufactured in Geelong at the old Ford factory.
Hazelwood, a large coal mine and power plant in the Latrobe Valley has been shut down. While the Greens celebrated, the Labor Party took a very different approach. The Labor government got to work. We didn't leave the thousands of workers and their families to just deal with the situation with Hazelwood closing down. We got to work providing training, skills and transition support. We also got to work creating Solar Victoria, the new government agency that now operates out of the La Trobe Valley, that was designed in order to oversee the installation that will see 650,000 Victorian homes sitting underneath solar panels to reduce the power bills of Victorian families. We had a renewable energy target and thousands of jobs being created, helping workers transition. We had a coherent climate policy, supporting workers, creating Solar Victoria, bringing down power prices and providing certainty to those companies that want to invest in Victoria.
Let's now swing around and have a look at what happened in Canberra. Well, as The Guardian says, Dutton and Pyne went nuts. There has been policy failure, with 15 different energy policies—none of which have provided certainty to the market—and weak targets. There have been cries of help from industry, met with absolutely nothing. We now have dead cats thrown onto the table, and the government and the energy minister asking the Standing Committee on the Environment and Energy to look at nuclear energy—something that's not going to bring down our emissions in the next decade, something that is very expensive and something that we currently don't have the ability to manufacture and create and oversee in this country. And we have a scandal-ridden energy minister, on top of a big stick.
That is the difference. It's the Labor government in Victoria—which has been getting to work and providing certainty for businesses and support for families, bringing down power prices by providing solar panels on their homes, and has a coherent energy policy with a vision for the future—versus the Abbott-Turnbull-Morrison government in Canberra, under which we get a big stick.
So, when we ask ourselves, as I asked at the start of this speech—and I know the member for Fraser here often asks this question of himself—'What is the point of the Abbott-Turnbull-Morrison government?' there is no answer. History won't be kind. There's no plan for connecting renewable energy. There's no plan for building transmissions. There's no plan to support small businesses. There's no plan to bring down our energy prices. There's no plan to provide certainty for investment. There's no plan to create an energy policy that will actually transition Australia, not just in the next 10 years but in the next 20 years. There's no plan to support renewable energy—the cheapest form of energy, according to AEMO in their latest GenCost report. There is no plan from this government, because all they've got is a big stick.
This country deserves better. The workers, the small businesses and the families deserve better. We stand with people and with families who rely on lower power prices—but, unfortunately, they're not going to get them from this government.
I rise to speak on the Treasury Laws Amendment (Prohibiting Energy Market Misconduct) Bill 2019, the so-called big stick legislation. Before I go to some of the detail of the legislation, I think it's important to actually talk about what has occurred in energy policy over the last six years under this government because, quite frankly, I can't think of any greater public policy failing in Canberra than this government's woeful energy policy experience. They've had 16 energy policies in six years—16! In fact, in 2018, they had four energy policies in 14 days in the heady month of August.
The sad fact is: it is Australian consumers and industry that are paying the price for this energy policy fiasco. Since 2015, wholesale electricity prices—the cost of producing electricity—have risen by 158 per cent. In fact, over the last 12 months, future prices for electricity have risen by 29 per cent. We've seen a tripling of gas prices in this country under this hopeless government. We've seen ageing generators facing a long hard summer ahead. Seventy-five per cent of our generators in this country are operating beyond their planned plant life, and that is of huge concern because, unfortunately, that will mean more blackouts in this country unless we get new investment.
I remember a fateful day in February 2018, when we hit 45 degrees in New South Wales, and I spoke to energy plant operators, the actual workers, in the four power stations in my home region of the Hunter Valley, which cumulatively produced 9,000 megawatts of power as their capacity, fully around 30 per cent of Australia's electricity generation. Each of them were struggling very significantly under the high temperatures and the demands that households and industry were placing on them. These power stations were all approaching the end of their natural plant life. That's what all their companies have said. Each of the companies involved, with the exception of Sunset Power, have placed closure dates on those power stations not because of government policy but because they are very old and the cost of maintaining them is skyrocketing. Liddell has a closure date of early 2023 set by the company. Origin has nominated 2032 for the Eraring Power Station, the biggest power station in the country, and 2035 or thereabouts for Bayswater.
These power stations need to be replaced because of their age, but, because of the energy policy fiasco from the government—16 policies in six years; four in 14 days in 2018—investors can't make the hard decisions to invest in plants where the payback is 40 or 50 years. We are also not seeing the necessary rule changes for the energy market to keep up to date with evolving technologies and consumer preferences. These are the real issues facing the energy market, but, sadly, none of them are addressed by the 'big stick' legislation. When this 'big stick' legislation was first submitted by the government, it had some serious issues, principally the fact that it was a backdoor to full privatisation of assets, particularly in Queensland, and also gave far too much power to the minister—a minister who is up there in being the most incompetent minister in this government. That's some competition there, but I think he takes the prize.
We worked on those two issues, and I'm glad to say that government came on board and fixed up both those issues. Labor is proposing to further strengthen this bill, particularly to ensure that there is no risk of partial privatisation, which is another important concern, and Labor will also fight to protect workers' rights by ensuring that their rights under the Fair Work Act are safeguarded in the event of divestment. Labor's support for the bill in this House is the conditional on these improvements that protect basic worker rights and rule out partial privatisation. Labor will continue to scrutinise the bill and is prepared to work with the Senate to address any further unintended consequences.
Labor does remain sceptical that this bill will do what the government claims—that is, lower power prices. The government presented no evidence, no analysis and no modelling to support this claim, and, as I said, power prices have skyrocketed on their watch. That's why Labor is proposing an amendment to review the bill before it sunsets. This review will look at its impact on the electricity sector, including affordability. Labor also calls on the government to work with experts and industry to ensure that there are no unintended consequences of the bill.
Following further consultation, Labor is concerned that, under the current bill, there is a risk that workers could lose protections and entitlements under the Fair Work Act in the event of divestment. Under the current bill it is not clear that the sale of an asset due a divestment order will be considered by courts to constitute a connection between the company subject to divestment and the purchaser of the asset, leaving open the possibility that the Fair Work Act transfer-of-business provisions will not apply. That's why we're moving this amendment to ensure that workers affected by divestment have all the protections they deserve under the Fair Work Act. I'm hopeful that the government will support this necessary amendment.
Let me say yet again why we're supporting this act, even though we don't think the bill will actually do much for the energy market. It is because we have gotten rid of the threat of full privatisation, we have dialled back the ridiculous powers granted to the minister and we're hopeful that two further amendments—around ruling out partial privatisation, and greater worker protection—can be addressed and achieve support from the government.
I want to flag another issue, which goes to the specific arrangement around the mooted closure of the Liddell Power Station. This power station is obviously very old. It is facing real issues around maintenance and reliability. As such, AGL have made the decision to close Liddell and replace it with a suite of other power sources—principally, a new gas-fired power station and Tomago, and a range of renewable energy sources, principally a windfarm and a pumped hydro project.
Importantly, AGL have given plenty of notice to its workforce and the community. They have given five years notice. This stands in stark contrast to the actions of ENGIE, who only gave four months notice for Hazelwood, leaving the workers and the community in the lurch, and the five months notice given by Alinta when they closed the Northern Power Station in South Australia. So AGL have done the right thing and given five years notice so that the workers and the communities close to my electorate can actually plan their future.
Equally as important as the notice, the company and the main trade union representing the workforce, the CFMEU Mining and Energy Division, have negotiated really solid outcomes to look after the workers. Principal amongst that is a commitment from the company and the union that there will be no forced redundancies and that every single worker at Liddell who wants to continue with AGL will either transfer across to the neighbouring Bayswater Power Station or will be accommodated in other parts of AGL. That is really important. There will be some workers who are probably approaching the end of their working life who are happy to take a redundancy package and retire early, but many workers, who might have young families and mortgages to pay, may want to stay in the industry. This is a fabulous initiative—an initiative that is consistent with what other countries have engaged in when they've seen major closures. It is something that I applaud both the trade and the company for engaging in in a very honest and brave manner.
If there is any divestment of Liddell, it is very important that these arrangements are not undermined. Let me repeat that: nothing in this bill should undermine what I think is nation-leading practice around the transition of a closing power station. That is why it is very important that the Senate look at this issue closely when it does its inquiry into this bill. I cannot support any initiative that undermines worker entitlements, and that is why we have moved the amendment around the Fair Work Act entitlements. Equally, we must ensure, as much as we can, that no consequence of this bill undermines the very important arrangements that the Mining and Energy Division of the CFMEU has negotiated for its members with AGL at Liddell—something that gives those workers and the community around Liddell peace of mind that they will still have jobs at the end of this process. I think it is an excellent policy.
Related to the Liddell issue is the Liddell task force that the New South Wales government has formed with the government to look at all possible impacts of the closure of Liddell. Somewhat bizarrely, so far the Commonwealth and the state government are refusing to have worker representation on this task force. They have representation from Muswellbrook Shire Council—which is good thing; they should have the local government representative—and the company is clearly on the task force, but not to include workers is a disgrace. This closure can only be managed through cooperation between the company, the union and the workers it represents, and the local community. So it is essential that there is a representative of the CFMEU Mining and Energy Division on the Liddell task force—not to throw bombs, because that's not the way they operate, but to engage in a cooperative manner to try to arrive at an outcome that benefits the community, that looks after the workers and that ensures energy security going forward. So I call on the Minister for Energy and Emissions Reduction to engage with and appoint a representative of the CFMEU Mining and Energy Division to the Liddell task force as a sign of goodwill. Quite frankly, it's the best way of maximising the positive outcomes from the Liddell task force, should it actually have any.
This really goes to the heart of the entire energy debate. The government is more intent on ideology than facts. We saw that with their civil wars in their party room around energy policy—with 16 energy policies in six years and knocking off a Prime Minister because he actually tried to do something in this area. This is not only having an impact on prices—with the wholesale energy price up 158 per cent, forward prices up 29 per cent and a tripling of gas prices—but also leading to a massive missed opportunity in the transition that is occurring in energy production all around the world. We are missing out on the massive opportunity, just as we did in the first round of solar technologies that were developed.
It's a little-known fact that 60 per cent of the photovoltaic cells—the things on people's roofs producing solar power—are based on technology developed at the University of New South Wales, but we got very little jobs out of this innovation, because the Howard government was so virulently anti-renewable energy. That was a massively missed opportunity. We are seeing another missed opportunity right now with the attack on renewable energy by this government. We have a renewable energy strike going on right now, because the delivery of the RET has been accomplished. Labor's RET has been fulfilled, and so renewable energy investment is falling off the cliff. This is a massively missed opportunity.
There are significant jobs to be gained in renewable energy if we have sound investment. The hydrogen industry could produce 16,000 jobs for Australia, taking advantage of the massive demand that is going to occur for clean hydrogen in the economies of North Asia. We can also be the home of energy-intensive manufacturing, because we have more solar radiation falling on our continent per square metre than anywhere else in the world, and we have great wind and wave resources as well. Once we get through the transition to renewable energy, we can be the home of low-cost energy-intensive manufacturing.
We are also greatly endowed with the inputs to the new clean energy technologies. We're the second-largest producer of rare earths in the world. We have the greatest reserves of iron and titanium, the second-greatest reserves of copper and lithium and the third-greatest reserves of silver. These are all instrumental, these are all key, to producing batteries, solar PV cells and other technologies. So there is a great opportunity for key parts of our mining industry to benefit from the clean technology boom. In fact, our metallurgical coal sector can also benefit. It takes 200 tonnes of coking coal to produce one wind turbine, and that's great news for our coal industry and is something I wholeheartedly support. These are the opportunities that are there to be embraced if we have a stable and rational energy policy.
Sadly, we are not seeing it from this government. We are seeing chaos and division. We have seen 16 energy policies in six years. We are seeing ideology run rampant. Half their party room is the tinfoil hat brigade, who don't accept the science of climate change. They don't accept market realities that renewable energy is now the cheapest form of new power. They have half their party room led by the member for Hughes, who is often off in cuckoo land, and then we have the other half who are probably worse! They are pragmatists. They think they can take political advantage of scaring people about climate change rather than taking action on greenhouse gas emissions. They will be condemned by history. They will be condemned by their kids and their grandkids for putting their short-term political interests ahead of a necessary transition that will be good for the economy, that will lower power prices and that will produce a whole new generation of energy— (Time expired)
I want to enter the debate this evening to speak on this important bill, the Treasury Laws Amendment (Prohibiting Energy Market Misconduct) Bill 2019. I want to place on record my concerns as a Queenslander and as a federal member who represents some disadvantaged areas about just how important it is that we get energy policy right in this country. I want to start by talking about some of the amendments that Labor has moved to the bill to ensure that, if it is to become policy, workers affected by divestiture are covered under transfer of business provisions of the FWA. Whilst our strong concerns around privatisation from the first version of the bill have been substantially addressed, we are proposing to strengthen this aspect of the bill to ensure there is no risk of partial privatisation.
I also want to ensure that we fight to protect workers by ensuring their rights under the Fair Work Act are safeguarded in the event of divestment. As I said, we know there have been some significant improvements in the bill than from when it was originally floated, but better protections are still needed. Under the current bill, it's not clear that the sale of an asset due to a divestment order will be considered by courts to constitute a connection between the companies subject to divestment and the purchaser of the asset, leaving open the possibility that the FWA transfer of business provisions will not apply. That is why these amendments are so important and that is why we're moving them today, to ensure workers affected by divestment have all the protection they deserve under the Fair Work Act. Labor's support for the bill in the House is conditional on these improvements that protect basic worker rights and rule out partial privatisation.
I want to take a moment to highlight to the House when it comes to energy policy a good example or, as we hear, an alternative approach that perhaps the government should look at. This is in my home state of Queensland under the Queensland state Labor government led by Premier Annastacia Palaszczuk, who continues to lead the way when it comes to sensible and effective management of energy prices to ensure that residents—
I am hearing the member for Herbert interject. I will take that interjection tonight, Mr Deputy Speaker McVeigh, because, as you know, as a former minister in the failed Newman government, one of the reasons the LNP was so comprehensively rejected—I notice the member for Herbert is now silent— because the party he supports were annihilated in Queensland, AND not for one election. I understand his commitment to privatisation.
I understand by his interjections, which I will continue to take, that he supports the current opposition's plan to privatise assets in Queensland. He's not denying that. I understand that because I have lived that experience. I have seen, just as the member for Herbert has seen, his party was annihilated. You, Deputy Speaker McVeigh, were a former minister in that failed government when you were rejected by the Queensland population, not on one occasion but on two occasions, because of its ideological commitment to selling assets, cutting public servants and then sacking people as well. Cut, sack, sell—that is in the LNP DNA in Queensland. So, through his continual interjections, I realise the member for Herbert's fervent commitment to privatisation of Queensland public assets. We, on this side of the chamber and Queensland Labor members fight every single day against what the LNP want in Queensland. So let me highlight for the member for Herbert's asset that the Queensland state Labor government have achieved savings for Queenslanders because we own energy assets—the generation, the poles and the wires. Now listening to the debate tonight, the member for Herbert would want to sell those assets and his party would want to sell if they ever had the misfortune of returning to government under a failed leadership experiment, a toxic experiment led by the LNP in Queensland.
Mr Thompson interjecting—
That's right! I will take the member's interjection. It didn't last long. The largest swing in Australian history to deliver the LNP state government was then the largest swing ever recorded against any government in the Southern Hemisphere to be rejected by the Queensland people.
These funds have also been reinvested across the electricity supply chain from generation, transmission and distribution to improve, maintain and deliver reliable power. More than $226.3 million was also invested into capital projects at Stanwell and CS Energy to keep generation assets running safely, reliably and efficiently. And another $210 million has been invested in polls and wires—the same poles and wires that the member for Herbert's party wanted to sell—in Queensland.
Mr Thompson interjecting—
Well, he's denying a fact in reality. And we know under his party, under the LNP in Queensland, power prices went up 43 per cent as they planned to sell Ergon and Energex. That was their plan; we know that. And their so-called regional competition policy would add $400 to every regional power bill or cost taxpayers another $700 million. He may think that's sensible economic policy. He may think that's sensible for regional Queensland. The hardworking members in his electorate will fight him every step of the way.
It's black and white when it comes to the difference between this side of the chamber and Labor governments. On one hand you will continue to see this side of the chamber fight for fair and reliable energy prices. On that side of the chamber we will see increased power prices and, sadly, privatisation.