Wednesday, 23 October 2019
Treasury Laws Amendment (Prohibiting Energy Market Misconduct) Bill 2019; Second Reading
To continue my remarks from yesterday, I want to place on the record in the House of Representatives that we all know that Australia is suffering what I would say is the worst energy crisis since the mid-1970s, and it's simply not good enough for the government to not have a real energy policy after six years in government. As much as they would have you believe otherwise, this bill will not end the nation's energy crisis.
The member for Rankin's second reading amendment to this bill, which I'm speaking to, highlights just how much of a failure the government is when it comes to national energy policy, noting that 'the government has proven unable to deliver sensible national energy policy to support well-functioning electricity markets that will support new clean energy investment, safeguard energy reliability and security, and deliver a modern and affordable energy system for a modern Australian economy. That really sums it up: a failure on every facet, in my opinion, when it comes to a national energy policy.
I want to place on the record today that, since 2015, gas prices have tripled and wholesale power prices across the national energy market have skyrocketed by 158 per cent, smashing household budgets and jeopardising tens of thousands of manufacturing jobs.
The lack of policy from the government has been cited by the Finkel review, the Energy Security Board, industry and Infrastructure Australia as driving up costs. These are the facts. This is not spin. This is not an invention. This is hard-core data which clearly shows that, under this government, for the last six years, we are paying more in energy costs than we have ever paid before as a nation. Today before the House we are debating a bill which is the 16th attempt by the government to get an energy policy.
Out in the real world, out in the community, people are rightly confused. Since 2013, the coalition has failed to act on climate and energy and, quite frankly, their policy record is one of abject and complete failure, summarised by rising electricity prices and rising carbon pollution. Since I've sat in the House of Representatives, when we have debates on energy policy, normally the only response the government has are some concocted imaginings or some nonsense like, 'We won't be as bad as Labor,' or 'Labor would be worse,' or 'State governments are to blame.' That's really summing up what the debate is. It's not any arguments or alternative approaches—isn't that an ironic term at the moment! They don't actually come forward with proper policy to debate this.
We did have that once. There was a glimmer of hope for a little while when we saw the birth of the National Energy Guarantee. I want to be very clear: whilst it was not perfect, the NEG was a mechanism designed to ensure reliability of supply and emissions reduction in the electricity sector. The current Treasurer and then former energy minister, I thought, was sold a pup. He was given orders by the former Prime Minister to go out and sell this as a policy, and we all know how that movie ended. It was ripped apart. The member for Hughes and the climate change deniers got their hands on it, went on to Sky News After Dark and ripped it apart. That chorus came down and said: 'We don't need it. It's not going to happen.' It was all destroyed—a bit like the leadership of the former member for Wentworth. It was dumped just as quickly as it was born, and that was supposed to be the answer to all our energy problems.
If I was a member of the government, I'd be embarrassed that, when I go to the community or to schools or when I got up in front of people, they would ask: 'How are we going to fix energy prices? How are we going to reduce carbon pollution?' You'd have to say: 'Well, we'll wait and see. We're not sure. We keep coming up with things, and they keep getting knocked over. Some people like it; some people don't.'
Recent reports show that state governments are privately talking to the government, in particular the New South Wales Liberal government, to try to work out what to do post-NEG. The Berejiklian government wants Minister Taylor to just revive the NEG, given pretty much every stakeholder in the energy sector would prefer a transparent national policy mechanism rather than the government simply picking winners. But media reports say the minister has said no. We still really don't know why the government doesn't come back to the table on real energy policy like the National Energy Guarantee, which the Prime Minister and Treasurer both said would bring down power prices by an average of $550. That was according to the government's own modelling. That's not Labor's research; that's what the government told us. If we had the National Energy Guarantee, power prices would come down by $550.
I also want to make this point: the NEG has the support of every business organisation and every state and territory government, Labor and coalition alike, and would have finally delivered the price release that Australia is desperately in need of. Australia needs real action to bring down energy prices right now, not just more talk.
After all of that, we arrive at the second go of the so-called 'big stick' policy: to scare companies into lowering power prices. The other thing about this heavy market intervention is—it's amazing when you look at the speakers list today on this. Where are the free marketeers? Where are the people who champion free economies?
Where are there freedom lovers wanting to defend open markets? It's eerily silent. After listening to all the first speeches of 'less government, less regulation, less red tape, less green tap' and on it goes, they're suspiciously quiet when it comes to this dare I say socialist-style, market-driven, Venezuelan, Cuban-style intervention into the marketplace. It is quite ironic to hear one side of the street talk and then see the other side watching that as it goes down. I want to be clear: this is not a plan for national energy certainty. It only leads to more chaos and confusion for industry and consumers. And that's exactly what the Australian Energy Council put forward in their Senate submission on this bill. They called on the government to alter many 'poorly drafted' parts of the proposed laws, saying it would otherwise risk more frequent price changes and leave consumers confused and frustrated.
Whilst Labor has played a constructive role, as we do, in cleaning up legislation and ensuring that the government's own homework is better, we still understand that we have an awful long way to go when it comes to dealing with energy security in this country and, in particular, the reduction of carbon pollution.
This coalition is a government of fakes and flakes, and this legislation proves it. There is no better example of fakes and flakes than what we're debating right now. Treasury Laws Amendment (Prohibiting Energy Market Misconduct) Bill is the official title but everyone refers to it as the big-stick legislation. Outside we get the government talking tough, saying that they'll use this to break up energy companies when they don't pass on drops in energy prices. Mind you, wholesale prices in this country have leapt nearly 160 per cent largely because there's no effective policy framework in the country. Inside here, with the media and all the people who rightly go, 'Hang on, is this the right step to take?' they go, 'No, no, this is a last resort.' Outside, they're tough; in here, they're timid and they don't want, they claim, to have to use this.
This legislation comes about because this is a government that haven't got their act together on energy because they fight amongst themselves. They've not been able to come up with some sort of coherent idea about how we'll generate energy in a much cleaner, more efficient way in this country. This is the big test for the nation—to do just that, to generate energy in a cleaner, efficient way. We'll sometimes have those opposite say, 'Well, look, we believe in climate change and we believe in the need to generate energy much better,' but they've got to come up with a practical idea, and what's their idea? The idea of those opposite is: 'Well, we're going to use taxpayer funds to generate power through coal. If the energy companies can't see our sense'—the coalition's sense of generating coal-fired energy—'then we're going to break them up and fund them with taxpayer funds. We'll generate it on our own.' What is practical about that? Nothing at all is practical about that at a time when renewables are going through the roof, and the government knows most energy players are going down this path.
The prime mover of reviews, the now Treasurer, Josh Frydenberg, went through all these incarnations: he went with an emissions intensity target. That got dropped because the hardheads in the coalition party room didn't like anything that sounded like that. He then went to a clean energy target. That got dropped as well. And then he ended on the NEG, the National Energy Guarantee, which again, they couldn't get their heads around. At that point in time, we had the spectacle of those opposite say, 'We're only going to put the National Energy Guarantee to the floor of this parliament if we get bipartisan support,' which suggested we weren't in favour of getting a coherent, sensible energy policy in this country—garbage; absolute rubbish! Why? Because, while we agreed, as my colleague the member for Oxley just indicated, we didn't think it was perfect, we thought it was good, better than what was on offer at that moment. So when those opposite said, 'Well, we need bipartisan support,' it wasn't that they needed support from us—bipartisan, two parts; what they needed was in their own party room agreement. They had this split between the Neanderthals and the sensibles—the ones who knew that they needed to get a policy in place—but the Neanderthals said, 'We are not going to have this NEG because it sounds too green; it sounds too much like we're doing something fancy that we don't like,' and they fought amongst themselves. It wasn't bipartisan with us; it was within them. The problem with that side of politics at the moment is that they have regressed into this sort of Trumpian slump, where they just ape what they're seeing on the other side of the Pacific and they're continuing this long conflict on this policy.
We need to get this right. As I said, a 160 per cent increase in wholesale power prices means that people are getting whopping power bills in the mail, and they can't believe their eyes. Why? Because those opposite have not been able to work out how, as I said earlier, we can generate energy in a cleaner, more efficient way. And this is the classic case. This is the most commonsensical thing. If you haven't got supply, guess what? If demand is up and there is no supply then prices are going to go up and that is exactly what has happened.
So we get this type of legislation being put to us here as some sort of suggestion that this is a serious attempt to deal with it. No, it's not. This big stick is about breaking up energy companies because they won't go against their business sense and do what the coalition wants in an ideological sense, and that is what we've got here. There's no better test, too. Outside, the energy minister, Angus Taylor, says, 'We want drops in wholesale power prices to be passed onto consumers.' If they're saying that this legislation, this big stick, will be taken to those energy companies and they will be broken up if they're not passing on drops in wholesale power prices to consumers, the test for them is this: go and use it on the banks.
The big debate we're having in this country is that every time there's an interest rate cut by the Reserve Bank of Australia, it is never passed on properly to consumers, in particular, to those people who are balancing paying off a home, while their wages aren't going up, aren't getting the hours they need at work, are doing everything they can to meet the cost of living, while power prices—mind you—are going up. If the banks won't pass on the interest rates cuts, where's the big stick? We get a lot of tough talk out of the coalition but we don't get any of this type of proposal being put out in the public space—that they'll pick up this divestiture power and put it on the banks and break up the banks. The banks are profiting massively. They're raking in billions by not passing on interest rate cuts at a time when ordinary Australians need them or the economy needs that boost to get it out of the spluttering state that it's in at the moment, where the IMF has downgraded growth four times more than most other economies, and our growth is expected to be slower than Greece. The coalition won't do that. They will not do this to banks at all—mark my words. They'll not use their so-called big stick on the banks. They will use this big stick basically to hold up a sign that says, 'fake action here', because that's what this bill is about. The coalition know they will be in a world of pain if they do this.
Sometimes in this weird world of politics, you have to give people what they are hankering for. If those opposite are hankering for this bit of legislation, they'll get it, and then we'll test and see what they actually do. I don't think it's necessarily a smart idea to break up these energy companies, because they know they've got these ageing coal fired generators they're not willing to put money into, they know the game is about finding new ways to generate energy in a much cleaner, more efficient way, and that's where they want to put their money. Why would you load them up with costs that you know will get passed onto consumers at any rate? But the government wants to break those companies up. That's what the claim is outside, not in here, and the test will be: will that actually happen?
The bigger test, though, is: will power prices actually come down? I reckon those opposite will not meet that test at all. This will not lead to a drop in prices and it certainly won't lead to a drop in emissions. The rest of the world is saying, 'Come on, we've got to get our act together on this and see that actually occur.' We are not going to see that whatsoever out of this government.
We're debating this legislation. If they want this legislation, they're going to get it. We're going to see if they actually deliver—deliver not more hot air, not more slogans, not more political stunts, but deliver results for ordinary people who want to see a drop in their power prices and who expect us to take the issue of climate change seriously and to do the things that will reduce emissions in the longer term for the benefit of the nation. That's what we expect to see. That is the challenge. That is the real test of whether governments in this country will take this seriously, will recognise the challenge that we've got before us, will take the steps to reduce emissions, will do the things that we expect will see energy generated in a much cleaner and more efficient way, and will also leave a legacy of a better future for those who will follow us, as opposed to the scenario we've got now, where inaction is genuinely concerning people. Those opposite will deride young people for taking time out of school to protest about the inaction and inability of adults to actually take this seriously. They'll also dismiss the hundreds of thousands of people out in our streets, in our capital cities and across the globe, saying this stuff needs to be taken seriously. They'll dismiss all that. But that's what those people that are marching expect us to do. They expect this place to be able to come up with a regime and a suite of measures that will see emissions drop—not this kind of big stick stunt we're getting right now—and to be able to genuinely address climate change and genuinely find a way to do all the things that people expect and want to see happen.
I rise to speak on the Treasury Laws Amendment (Prohibiting Energy Market Misconduct) Bill 2019. We've had 10 years of energy policy uncertainty and half a dozen failed attempts by both the government and the opposition to sort this out. As a result, household energy prices have ballooned by 56 per cent in the last decade, pushing many households around Australia into financial stress. The majority of this price increase was driven by network costs caused by gold plating; the network companies and these players have not been dealt with by this bill. We've seen increases in the wholesale electricity prices, not renewable generation. We have been under a policy of relying on coal-fired power and gas, and that has led to rising prices. In the last few years, the government has introduced legislation like the Default Market Offer and the Retailer Reliability Obligation to try to bring prices down. This bill, allegedly and supposedly, is going to help reduce prices further. This will be a test because this will be followed and watched closely.
What is in this bill? We've heard a lot about it, so it's important to understand it. The government is seeking to introduce new remedies for high power prices, specifically dealing with alleged anticompetitive conduct in the National Electricity Market. What does it purport to do? In the retail market, in the event of a sustained and substantial reduction in supply chain costs, retailers will be required to make reasonable adjustments to their retail prices for market offers, including to households and small businesses. In the wholesale market, generators will be prohibited from manipulating the spot market, and that can occur in a number of ways set out in the explanatory memorandum. In the contract market, energy companies will be prevented from withholding hedge contracts for the purpose of substantially lessening competition.
This legislation sets out graduated remedies that can apply in the event of misconduct. The ACCC will be able to issue a warning notice, accept an enforceable undertaking or seek a financial penalty of up to $10 million, three times the value of the total benefit attributable to the conduct, or 10 per cent of the annual turnover of the corporation in the 12 months before the conduct occurred—extremely significant, severe financial penalties. In addition, the ACCC will also be able to recommend that the Treasurer either issue a contracting order or pursue a divestiture order in the courts. The contracting order will essentially subvert the processes of a company and force it to run a business in a way that may not be consistent with its shareholders or internal decisions.
What evidence do we have to rely on for the basis of this bill? I'm deeply concerned that this bill is trying to solve problems that, first of all, don't exist. I must say, there have been a number of speakers in this House who have made very important points, including the member for Indi yesterday. The government likes to point to alleged price manipulation behaviour around the closure of Hazelwood in Victoria as evidence for the necessity of these new remedies, but the Australian Energy Regulator investigated those events and found that the Hazelwood closure did not identify instances where the opportunistic exercise of market power significantly affected average price outcomes in Victoria or South Australia and therefore did not agree with the government that there had been such conduct. In a later report, they found:
Despite this vulnerability to the exercise of market power, we did not identify short-term behaviour as contributing to recent price rises.
But the government doesn't want to listen to those findings. Instead, it wants to listen to its own agencies, who used flawed analysis from policy advisors like the Victoria Energy Policy Centre. In relation to the report that they came up with, Frontier Economics wrote this:
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.
And, finally, the ACCC, who will be tasked with providing recommendations to the government on prohibited conduct under this bill, said that the behaviour that this bill seeks to remedy has simply not occurred.
What is the likely effect of this bill? That's what we really need to be concerned about. Despite not having any evidence that justifies the remedies, the bill will have a significant effect on the National Energy Market. The Law Council of Australia concluded that the bill's remedies are heavy handed, disproportionate and overly bureaucratic market reforms to perceived prohibited conduct and to some extent double up on powers which already exist under section 46 of the Competition and Consumer Act for market misconduct and the default market offer already introduced by the government. Furthermore, they suggest that, in attempting to remedy possible misconduct with sections like 153E, F, G, and H, this bill introduces uncertainty which will have negative effects on the market. These sections need considerable tightening up.
The legislation will further distort the market by adding further regulation, which will affect investment in an already fragile investment climate. The Grattan Institute echoes the Law Council's submission, saying:
... hasty government intervention risks making things worse rather than better. Lowering prices ultimately requires private investment; a short-term ‘company bashing’ approach may well prove counter-productive.
Also, on the alleged misconduct, they say:
Not only did the ACCC never say these things are happening and they also said in their view having integrated gentailers was actually a good thing and would actually reduce the overall cost.
I have a particular concern with the provisions regarding contracting orders in sections 153W and 153X. Such powers require an assessment that should be made by a court, not the Treasurer. My concerns—and they have not been addressed in the explanatory memorandum or the bill or by the minister—are that these powers can be misused by the Treasurer to keep generators open or allow the minister to reopen closed generators that have been closed due to a company strategy, resolution or due care and safety reasons. If a company decides to close a fossil-fuelled power plant for commercial reasons or in line with their stance on climate, they must not be victims of coercion by this government to stay in the market, as we have witnessed with Liddell. I was assured by the minister that the powers under this bill would not be used for this purpose, but I call for this to be put on the public record by the minister. These orders cannot be used to force coal-fired power plants to stay open or be used for an ill-conceived plan by some to get control of a coal-fired power generator.
What is the appropriate way forward? Market observers are saying that this legislation is the exact opposite of what the National Energy Market needs at the moment and that this bill is another part of a piecemeal attempt at energy policy. What we actually need to deal with energy prices is a settled energy policy, and the best we have had to date would be the National Energy Guarantee, which had bipartisan support from state governments and industry. Kerry Schott, the chair of the Energy Security Board, said, on the policy front:
One of the things that does make it difficult is the lack of integration of emissions reduction with the energy market.
… … …
And the world would be much easier if we knew, for example, a national target out at 2050, or some guide of where we're going.
Integration of emissions reduction and a target are both what the National Energy Guarantee sought to remedy. This is further emphasised by the ACCC, who said in their latest report on the NEM price:
The National Energy Guarantee seeks to more clearly link the introduction of lower emissions generation sources to the ability to call on generators to produce energy when it is most needed. To the extent that this policy can encourage investment in capacity from a diverse range of sources, diluting market concentration and promoting competition to supply retailers, the policy should assist in delivering electricity affordability.
If policy is not used in that way to integrate these factors, it will create further instability and discourage investment in the energy sector—if not the NEG then at least something to replace it. This could be a clean energy target that includes signals for firming, which was the 50th recommendation of the Finkel review. It was, at the time of the report, the most effective mechanism to drive investment in renewables, other than an emissions trading scheme.
Academics like Blakers and Stocks at the Australian National University have identified enormous opportunities for renewables if we provide a mechanism for new transmission and transmission upgrades to enable renewable energy zones like New South Wales to Queensland via New England or access to zones in South Australia via the river link. The Integrated system plan, which is Australia's most comprehensive energy system planning document to date, created by the Australian Energy Market Operator, lays out transmission possibilities and should be integrated into the government's energy policy decision making. Both AEMO and Blakers and Stocks simply state that, if we provided signal for transmission, this would bring on the next wave of investment and competition in the market. As for firming, Blakers and Stocks have identified over 22,000 pumped hydro sites in Australia, a fraction of which could meet Australia's storage needs for a 100 per cent renewable energy grid. In a recent committee hearing they maintained that 100 per cent renewable energy is not an engineering problem. It is technically straightforward; the only barrier is the politics.
What are the opportunities for Australia in energy? Australia has an unprecedented chance to turn the country into a renewable energy superpower. The GenCost 2018 report by CSIRO and AEMO, which investigated the cost of various forms of generation in Australia, showed us that renewable energy by itself is the cheapest cost of new generation, at roughly $45 to $55 per megawatt hour and, firmed with six hours of pumped hydro, would be roughly $90 to $100 per megawatt hour. This is because our abundant sun and wind resources and engineering ingenuity give us a natural advantage over other nations. We must harness this opportunity. People in Warringah want to see this. Many are willing to contribute to a new era in energy. We have renewable energy developers at the Manly Solar Beach hub, like Solar Choice, Edify Energy and WIRSOL, already helping to fix our energy mess. These companies have already developed over one gigawatt of renewable capacity in Australia. That is powering the equivalent of over 500,000 homes. Now they are on the new frontier of battery storage, contributing to pioneering projects like the Gannawarra battery and investigating the applications of virtual power plants.
Outside of Warringah, we are already seeing plans for renewable energy exports to Indonesia, and massive renewable hydrogen projects as well. The Australian National University's Zero-Carbon Energy for the Asia-Pacific project is suggesting that we build a high-voltage undersea cable to Indonesia from the Northern Territory that could export 440 terawatt hours of electricity yearly. They are working with developers like CWP Renewables to achieve this. They further add that we could use renewables to make green steel and green hydrogen, and the combination of these would grow to the equivalent of our current fossil fuel energy exports and iron ore volume.
The Australian Renewable Energy Agency is supporting these kinds of endeavours. They are part financing early-stage hydrogen projects in Queensland. ARENA has put in a total of $2.9 million to one project in Moura, which is proposing to produce 20,000 tonnes per year of ammonia from 3,600 tonnes of renewable hydrogen. ARENA is doing this with projects across the board, from electric vehicle charging to battery storage, demand response and transmission technology. To keep up their good work, they urgently need assurances from the minister of continued funding past 2022. This agency is essential for our energy future.
These projects are just some examples of what we can achieve if we set our minds to the future. To get us there, we need considered policy—not just big sticks, which will drive away investment and create instability. Customers will be the ones who will pay for that instability with higher prices, and they will pay for poor planning policy. I call on the government to present a considered energy policy that will take Australia into the future. Much more is needed.
This bill, theTreasury Laws Amendment (Prohibiting Energy Market Misconduct) Bill 2019, delivers on our commitment to the Australian people to bring down power prices and stop dodgy conduct. It puts them back in control of their power bills. This bill once again shows that the Liberal-National government is on the side of hardworking Australians by ensuring energy savings are passed through to customers, introducing real penalties to stop the unacceptable and unsustainable conduct called out by the ACCC in their report last year and ensuring that big businesses can't manipulate the market to drive up prices.
The bill, importantly, complements the work since the election. From 1 July, we implemented a price cap on the highest standing offers, which is bringing and has brought down power prices by as much as $663 for some households. This comes on top of the government's work to stop dodgy discounting and charges from the big energy companies, including sneaky late-payment fees that were crippling those who could least afford it. From 1 July, we have also delivered the Retailer Reliability Obligation, which requires retailers to guarantee their energy supply three years in advance. It will keep prices down and ensure that the lights stay on. Whilst there is still more to do, I'm pleased that the most recent data shows that Australian power prices are dropping in the CPI.
Looking forward, the government's Underwriting New Generation Investments program will deliver new reliable generation into the market, putting downward pressure on prices and ensuring, importantly, the security of the grid. Further, we've introduced legislation to ensure that lower power prices are passed on to customers by the big energy companies.
I turn now to the bill. The bill will amend the Competition and Consumer Act 2010, introducing a new legislative framework to support the ACCC's electricity price monitoring inquiry. The bill is a targeted and time-limited intervention that aims to act as a deterrent to electricity businesses from engaging in the kinds of behaviour that, in the current energy market, could result in poorer outcomes for consumers. The ACCC's inquiry will monitor retail prices, contract liquidity and wholesale bids and conduct in the National Energy Market between 2018 and 2025.
The ACCC's new inquiry is framed around three key issues identified in the retail price inquiry final report, which was publicly released on 11 July 2018: first, retail pricing structures are confusing and make it difficult for consumers to compare and switch offers; second, new electricity retailers can face a barrier to entering the market due to liquidity issues in electricity contract markets; and, third, there is a general lack of competitive constraint in the wholesale electricity markets. The legislative framework complements the ACCC's inquiry with three new prohibitions designed to address the specific electricity market conduct that's detrimental to competition and consumer welfare. The retail pricing limb will target retailers that take unfair advantage of consumers' confusion around electricity offers and the difficulty of identifying and switching to better deals. It will require that supply chain cost savings are passed on to consumers on market offers, rather than increase retailer profits.
The contract liquidity limb and the wholesale bids conduct limb target anticompetitive behaviour in the markets which can lead to price increases that flow through to consumers. There are prohibitions on conduct that threatens the effective and efficient operation of electricity markets and leads to poor outcomes for consumers. These prohibitions are specifically designed to neither interfere with how our electricity markets are supposed to operate nor impact on genuine, efficient operational decisions by electricity market participants. Failure to offer a financial contract because of the plant being unavailable due to mothballing or closure would not be considered prohibited behaviour.
To ensure effective enforcement of the prohibitions, the bill will equip the ACCC with a graduated set of remedies, including ACCC-issued public warning notices, ACCC-issued infringement notices and court-ordered civil penalties. For the most serious breaches of the new prohibitions, the legislation contains a notice, response and recommendation process, leading to the potential imposition of the strongest sanctions: Treasurer-issued contracting orders and court-ordered divestiture orders.
Where the ACCC identifies a potential serious breach, it will notify the relevant company. The company will be given an opportunity to respond by explaining and rectifying their conduct. If the ACCC is not satisfied with this response, the legislation provides a process for the Treasurer to make a contracting order or apply to the Federal Court for a divestiture order on a recommendation from the ACCC. Contracting orders will only be available for breaches of the contract liquidity prohibition as well as aggravated breaches of the wholesale conduct prohibition. Divestiture orders will only be available for aggravated breaches of the wholesale conduct prohibition. Both the ACCC and the Treasurer must consider the remedy proportionate and targeted to the conduct and, in the case of a divestiture order, that the order would result in a net public benefit.
In the case of a government-owned corporation, a divestiture order can only require divestiture to another government-owned corporation. The bill does not empower the court to order divestiture to a private purchaser. This ensures that the relevant asset remains in government ownership, while still addressing the misconduct in question and promoting competition. The appropriateness of seeking a divestiture order or contracting order will be assessed on a case-by-case basis. But divestiture will be considered a last-resort response, reserved for the most egregious breaches for which other remedies are not sufficient to address the conduct. These are significant remedies, and I do not expect to have to pursue them, but we will do so if required.
The government is confident, particularly given the international experience, that divestiture orders, as a measure of last resort, will not act as a deterrent to investment in Australia. Indeed, the real deterrent to investment in Australia is anticompetitive conduct. While evidence may clearly establish that a corporation has engaged in the proscribed activity for the purposes of substantially lessening competition or to distort or manipulate spot-market prices, the bill follows precedent in the Competition and Consumer Act to allow the purpose of the corporation to be ascertained by inference from the conduct of the corporation, the conduct of other people or the circumstances relevant to the conduct. Provisions of this type already exist in the CCA in relation to hindering access to declared services, exclusive dealing and hindering a standard access obligation. The drafting of this provision reflects the existing law and the long-held understanding of the provision at law by all parties to provide clarity and certainty.
These laws will commence six months after royal assent, allowing a transitional period for the ACCC to develop guidelines and make its enforcement approach clear to industry. The amendments circulated by the opposition simply replicate what will already be the effect of the bill. That said, to give complete comfort to the chamber, the government is willing to support these amendments. I thank the opposition for working with the government to ensure that these amendments do not have any unintended consequences.
Finally, this bill also amends the CCA to provide additional information-gathering powers to the Australian Energy Regulator. This will support their functions under the default market offer and the reference bill.
This bill is a key part of our policy platform—a policy platform that has no shortage of endorsements. The Western Australian state Labor government has said, 'The government won the election and has a mandate to follow its policies through.' The member for Hunter has backed our policies in a ruthless and unsparing review of the member for Hindmarsh, and the Australian Workers Union, which produced many of those opposite, now endorses the government's policy. While I welcome the constructive way that the opposition has now come to support this bill, I call on those opposite to back our policies on energy and emissions reduction across the board, as some already have. I commend this bill to the House.
The original question was that this bill be now read a second time. To this the honourable member for Rankin has moved as an amendment that all words after 'That' be omitted with a view to substituting other words. The immediate question is that the amendment moved by the member for Rankin be agreed to.