Josh Wilson (Fremantle, Australian Labor Party, Assistant Minister for Climate Change and Energy) Share this | Link to this | Hansard source

I present the explanatory memorandum to this bill and move:

That this bill be now read a second time.

This bill marks a significant step in our commitment to improve regulatory outcomes in the energy sector, by ensuring dedicated governance and accountability structures that are tailored specifically to energy market regulation.

The intention of this bill is to amend the Competition and Consumer Act 2010 to separate the Australian Energy Regulator (the AER) from the Australian Competition and Consumer Commission (the ACCC), establishing the AER as a non-corporate Commonwealth entity with operational control of its staff, resources and governance arrangements.

The AER is the independent regulator of wholesale and retail energy markets and energy networks, mainly across southern and eastern Australia, under national energy laws and rules. Its key activities include energy network regulation, compliance and enforcement, and the performance monitoring and reporting of energy wholesale and retail markets as well as network businesses.

Taken together, that is an incredibly important function—as perfectly well expressed in the AER's purpose, which is 'to ensure energy consumers are better off, now and in the future'.

The AER currently operates as a constituent part of the ACCC. Both organisations are a single Commonwealth entity for the purpose of the finance law. The AER shares staff, resources and facilities with the ACCC—and as a result, the AER board, which is responsible for regulatory functions, does not have direct control over resources and staff, which remain under the ACCC's authority.

This proposed amendment to legally separate the AER from the ACCC will remove the governance risks that hinder the AER's ability to manage its increasing regulatory responsibilities effectively. It will enable the AER to operate effectively as an independent entity.

The bill will not change the key elements of the Australian Energy Market Agreement—such as the role and function of the AER as the independent energy regulator, the composition of the AER's board, the requirement for the Commonwealth to fund the AER, and the administrative law arrangements whereby the decisions of the AER will continue to be subject to judicial review by the Federal Court.

The national energy laws—which provide the AER with more detailed functions and obligations—will also remain unchanged.

It has to be acknowledged that several independent reviews have recommended an autonomous AER.

In 2015 the Review of Governance Arrangements for Australian Energy Markets, chaired by Dr Michael Vertigan, considered governance arrangements of the Australian energy markets and recommended that the AER should have full management and financial autonomy, which would most effectively be achieved by re-establishing the AER as a standalone regulatory body.

The 2017 Independent Review into the Future Security of the National Electricity Market, led by Dr Alan Finkel, noted the AER's role is highly technical and sector specific, and that by constituting the AER as a separate energy agency we would be mirroring the structures of other energy market bodies and comparable energy regulators in similar countries.

State and territory energy ministers have been consulted on the proposal, and, on 19 May 2023, agreed the AER should be established as a standalone Commonwealth entity.

It would surprise no-one to observe that the AER's operational environment has evolved significantly since its establishment in 2005. As the energy market becomes more complex, and with the AER's regulatory functions expanding, the AER needs the authority to manage its own resources and to set its own strategic direction independently from the ACCC.

The ambitious scale and pace of the energy transition requires the AER to operate with greater financial and operational autonomy. A distinctly separate AER will provide for greater management and financial autonomy, contributing to the overall effectiveness of the AER as Australia's energy regulator.

Creating a standalone AER will formalise its governance responsibilities, including for managing its budget, human resources and risk oversight. This change will allow the AER to better align its internal operations with its regulatory mandate and strategic goals.

This is essential for effectively managing the energy transition, overseeing wholesale and retail markets, and addressing issues like energy affordability and network regulation. In other words, this change will make sure the AER is better placed to do what we need it to do in the best interests of the Australian community.

The bill supports the broader energy policy of the government, enabled through the National Energy Transformation Partnership, a framework for Commonwealth, state and territory governments to work together on reforms to help transform Australia's energy system to achieve net zero greenhouse gas emissions by 2050.

One of the priority themes of the framework is strengthening energy governance architecture.

The bill is a necessary and forward-looking reform that helps achieve this priority theme.

The government is committed to delivering affordable, reliable, and clean energy for all Australians, and the reforms contained in this bill will help make that vision a reality.

Dan Tehan (Wannon, Liberal Party, Shadow Minister for Energy and Emissions Reduction) Share this | Link to this | Hansard source

It's no wonder that the Minister for Climate Change and Energy didn't come into the chamber to speak on this bill, because, if you'd ever wanted an example of how out of touch this minister is, this is just another example of it. What we've seen since the election is that the government has had to walk away from their commitment to reduce Australians' power bills by $275. After looking the Australian people in the eye on it, on over 90 occasions, they've now had to walk away from it.

It was funny today in the MPI. They've got new talking points. Guess what the new talking points say? 'Every time you mention that energy prices are going to go down, you've got to say "in the long term".' These are the new talking points: 'Energy prices will go down in the long term.' People remember that it wasn't just a commitment to reduce power bills by $275 by the end of this year; there was also a further commitment. Now, obviously, you're walking away from that as well. That's why this expression 'in the long term' has come in.

Of course, the minister won't come in and speak to this bill because he knows that what it will show is how embarrassing the situation is that he has got Australia into. Energy bills aren't going down; everyone knows that. Everyone sees it every three months when they open their power bill. When they open their electricity bill, it's up by 39 per cent. Their gas bill is up by 38 per cent. They've heard the recent inflation numbers. What was the inflation number from yesterday? It showed that electricity costs rose by 23.6 per cent for the year to September, and the only reason they didn't rise further is that you had to subsidise those bills. Those are the facts. And yet here we are.

Given all of this—that prices are going through the roof—what is the first bill the minister brings into the parliament? Guess what it is. It's about shuffling the deckchairs in the bureaucracy. It beggars belief, seriously! We've got energy prices going through the roof, and Minister Bowen decides, 'What I need to do is shuffle the deckchairs.' That's really going to fix the issues!

We've had, just this week, the announcement that Tomago, sadly, is likely to close. Over 5,000 workers are going to lose their jobs. And guess what the minister is here doing, as his first bill? He's shuffling the deckchairs in the bureaucracy. So it's no wonder he sent another minister in to do it, because it would just show once again what a complete and utter farce this minister is.

As a matter of fact, the only job that should go from these higher electricity prices is the minister's job. That is the job that should go, not the jobs of those poor workers out there. We're going to keep reminding you every single day of that fact. This is just another example of why that minister should move on, given the crisis that we're starting to see with electricity prices, because here he is, shuffling the deckchairs of the bureaucracy. How out of touch can you get? It beggars belief.

It's complete silence from them, over there, because they know that they don't have anything to say in response. When they're out in their constituencies, what are they hearing? They're hearing that electricity prices continue to rise. Our No. 1 priority will be to reduce electricity prices, to put downward pressure on electricity prices. That is what we will do. The minister isn't here. He was too embarrassed to come in because this is the first bill he's put into this parliament on anything to do with energy since the May election, and it's about shuffling the deckchairs. I say to the minister: we will be focused on putting downward pressure on energy prices. We won't be issuing talking points which used to say, 'We will reduce your power bill by $275,' but now just say, 'Energy prices will come down in the long-term,' whatever that means. Is that by 2050, 2060 or 2070? Who would know?

Tim Wilson (Goldstein, Liberal Party, Shadow Minister for Small Business) Share this | Link to this | Hansard source

When nuclear comes.

Dan Tehan (Wannon, Liberal Party, Shadow Minister for Energy and Emissions Reduction) Share this | Link to this | Hansard source

Well, in the end, as the premier—

Sharon Claydon (Newcastle, Australian Labor Party) Share this | Link to this | Hansard source

Member for Wannon, I know it's Thursday afternoon, but let's get back to the relevance of the bill before the House.

Dan Tehan (Wannon, Liberal Party, Shadow Minister for Energy and Emissions Reduction) Share this | Link to this | Hansard source

Some might think I've been 'Laboring' the point, but this is the wrong bill for the wrong time. That said, what does this bill do? It changes the Public Service arrangement for the Australian Energy Regulator and the ACCC. When we were presented with the recommendation that we should do this, we looked at it and went, 'Well, what are our priorities?' Our priorities are focused on putting downward pressure on energy prices. So we thought, 'Okay. We can leave them shuffling the deckchairs while we make sure that we are putting downward pressure on energy prices.' And that was our focus because we wanted to make sure that that was our No. 1 priority.

We can understand that there does need to be some rearranging when it comes to the AER and the ACCC. We sat down with the department, the ACCC and the AER and made sure that there would be nothing in these changes that would lead to people's energy bills going up, because our No. 1 priority is to make sure that energy prices don't continue to go up. We sat down and sought guarantees that that would be the case, and we were given those guarantees. That's why we think that the minister's idea of shuffling the deckchairs is one that we should support.

Sharon Claydon (Newcastle, Australian Labor Party) Share this | Link to this | Hansard source

Assistant Minister, a point of order?

Andrew Leigh (Fenner, Australian Labor Party, Assistant Minister for Productivity, Competition, Charities and Treasury) Share this | Link to this | Hansard source

After the fifth mention of 'deckchairs', I call your attention to standing order 75 on tedious repetition, which the member is clearly transgressing.

Sharon Claydon (Newcastle, Australian Labor Party) Share this | Link to this | Hansard source

There's been a bit of latitude on this Thursday afternoon, but let's, in the remaining 90 seconds, perhaps get to the context of this bill.

Dan Tehan (Wannon, Liberal Party, Shadow Minister for Energy and Emissions Reduction) Share this | Link to this | Hansard source

He didn't take a point of order on the repetition of you driving energy prices higher and higher and higher. I can understand why you didn't, because you know how sensitive that is.

Sharon Claydon (Newcastle, Australian Labor Party) Share this | Link to this | Hansard source

Direct your comments through me, please.

Dan Tehan (Wannon, Liberal Party, Shadow Minister for Energy and Emissions Reduction) Share this | Link to this | Hansard source

I will get back to the bill. This bill is about changes to the ACCC and the AER. We have made sure that these changes will not drive costs when it comes to putting pressure on energy prices. We have been given assurances that they won't do that. That is why we are happy to support this bill. I would say this: seriously, Minister, there are jobs at stake at the moment from the high energy costs that you are overseeing. There are businesses who are deeply, deeply worried about the impact of the cost of energy, and we want to make sure—